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The High Cost of Flying High

Indonesia Increasing Import Duties on Alcoholic Beverages and a Host of Consumer Goods

Indonesian Finance Minister Sri Mulyani has made the decision to slow the importation of alcoholic beverages by increasing importation taxes (PPh Impor) applied to such products.

CNN Indonesia, reports that Ministerial Decree Number 110 of 2018 stipulates a 7.5% tax be applied on alcoholic beverages. The increased “new” import tax will apply on wine, sake, brandy, whiskey, vodka, arak and bitters.

At the same time, the Government has announced a list of 1,147 consumer products that will also be subject to import taxes. The amount of tax on these consumer good will vary between 2.5 – 10% in order to curve imports while at the same time the Government is promising to monitor instances when the new import tax will represent a negative impact on the local economy where imported goods are needed in the production of domestic products.

Meanwhile, Commerce Secretary Enggartiasto Lukta has told the press that in addition to the increased import taxes the Government is taking other steps to curb imports, including changing from a system of “post-border” inspection of imported goods, such as steel and alcoholic beverages, to inspection at the actual border entry points.