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Indonesia Cuts Import Duty Exemption to USD $75

  •   28 Sep 2018
  •    Hedy He
  •  263
  •   Post a comment

    Takehome:

    Indonesia will lower the import duty exemption threshold on inward postal goods from USD $100 to USD $75 starting from October 10th, 2018.

    If the imported goods value exceeds USD $75 (including shipping costs), the consignor must pay a 7.5% import duty. The lowering of the import duty exemption and raising of import tariffs on 1147 goods are both designed to discourage importation activities and stoke consumption of domestically manufactured products. 

    The tax exemption policy for entering postal goods is to facilitate the purchase of goods by individuals or companies on e-commerce platforms abroad or cross-border e-commerce platforms in Indonesia. The tightening of the concessions is because Indonesian Ministry of Finance has found that some merchants deliberately divided imported goods into several batches to avoid paying taxes (tax based on total value of individual consignment rather than accumulated value of separate consignments). The widespread adaptation of this evasion strategy also negatively impacted domestic enterprise.

    Import Tax Policy after Amendment:

    Goods Value

    Importer

    Import Type and Tax Rules

    Confirmation of Declared Value

    Dossiers Necessary

    Less than or equal to $75

    Individual or business

    Tax exemption

    Customs authority

    Restricted goods require an import license or approval certificate issued by relevant authority

    More than $75, less than or equal to $1500

    Individual or business

    Cleared as a  “consignment note” at single import tax rate of 7.5% (except for textbooks exempt from import taxes)

    After the Customs confirm the declared value, goods are taxed at single import rate of 7.5%

    Informal declaration(PIBK): Tax number(NPWP)

     

    Formal declaration (PIB): Import license number (API), tax number (NPWP), customs registration number (NIK).

     

    Import restricted goods shall provide import license or approval certificate issued by relevant authority

    Formal/informal declaration (PIBK/PIB):

    calculate tax based on customs import tariff (BTKI)

    Tax amount submitted by importers and confirmed by Customs

    More than $1500

    Individual

    Informal declaration(PIBK): calculate tax based on customs import tariff (BTKI)

    Tax amount submitted by importers and confirmed by Customs

    Informal declaration(PIBK): Tax number(NPWP)

     

    Formal declaration(PIB): Import license number(API), tax number(NPWP), customs registration number(NIK).

     

    Import restricted goods shall provide import license or approval certificate issued by relevant authority

    Business

    Formal declaration(PIB): calculate tax based on customs import tariff (BTKI)

    Imported Cosmetics Policy

    Indonesian BPOM has been paying close attention to the food and beauty products customs and tax policies, but relevant policies for cosmetics are still unclear.

    Indonesian officials are referring to Singapore’s regulations. For example, imported products for personal use can be exempt from notification by BPOM. However, the government is worried that companies would use the policy to illegally import goods declared as personal goods to bypass BPOM supervision– this is exactly the dilemma facing Singapore. The current practice in Singapore is to directly ask the consignee the use of the goods, but it is still unknown whether Indonesia will adopt this approach or not.

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