26 October 2018 Indonesia releases new regulations on import taxes In September 2018, the Indonesian Government issued two new regulations on import taxes that increased the withholding tax rates on a range of goods and a regulation update on importing goods through a postal service. The new regulations are intended to moderate the imports of consumer goods in an effort to reduce Indonesia's current account deficit, as the deficit has been considered as a factor in the Indonesian Rupiah's recent depreciation. Further, the new regulations are aimed at protecting the national interest and encouraging domestic industrial growth. On 5 September 2018, Indonesia's Minister of Finance (MoF) Regulation No. 110/PMK.010/2018 (PMK-110) was issued to increase the rate of the Article 22 withholding tax on the importation of certain goods or delivery of goods for other business activities. PMK-110 is effective for transactions occurring on or after 13 September 2018. The Article 22 withholding tax is in the nature of a pre-payment that can be credited against an importer's annual corporate income tax liability. PMK-110 amends MoF Regulation No. 34/PMK.010/2017 (PMK-34), under which the Directorate General of Customs and Excise is responsible to collect Article 22 withholding tax on the importation or exportation of the following goods:
PMK-110 reclassifies certain goods from Category 2 (7.5%) to Category 1 (10%). This reclassification affects more than 1,100 items of goods, such as consumer goods, care products, cosmetics up to luxury cars. Details are on provided in the appendix of PMK-110. On 6 September 2018, the MoF issued MoF Regulation No. 112/PMK.04/2018 (PMK-112), effective on 10 October 2018. PMK-112 amends MoF Regulation No. 182/PMK.04/2016 (PMK-182) that governs the import provisions on goods that are imported into Indonesia through a postal service in accordance with the postal laws and regulations. PMK-112 is aimed at protecting the national interest, given the increase in the volume of imported goods through the postal service and improving domestic industrial growth. Under PMK-182, imported goods for consumption with a maximum customs value of Free-on-board (FOB) US$100 for each shipment was exempt from import duty. PMK-112 decreases the maximum customs value for the exemption to FOB US$75 for each shipment per day; or more than one shipment per day, provided that the total customs value of all shipments does not exceed FOB US$75. If the value exceeds the threshold, the shipment is subject to import duty and import taxes on the whole customs value. Where the threshold is exceeded, the customs and excise officer will officially assess the import duty and the customs value as follows: PMK-112 also revises some definitions and limits concerning the importation of tobacco and alcohol products. PMK-182 is still applicable to provisions other than those specified in PMK-112.
Document ID: 2018-2147 | |||||||||||||||||||||||||||
