Indonesia changed their import regulation! And you need to know about it.

The Directorate of Customs and Excise in Indonesia has just announced on the 23rd of December, 2019 that they will changing the regulation for de minimis or duty free limit from USD 75 to USD 3 in their efforts to protect the local businesses.

So, this is should not be shocking news to anyone. We've previously mentioned that Heru Pambudi has plans to abolish the duty-free limit altogether. Without proper regulations being published just yet, this is what we know:

Parcels above IDR 45.000 will incur duties and taxes regardless of how many parcels that individual imports. Different from the USD 75/person/day regulation that is currently being enforced.

The biggest changes is in how the tariffs for duties and taxes are. These will now not only be lowered, but may increase for certain category of items. From a distribution from the Customs Authorities, this is the information given:

Category Duty (BM) Tax (PPN) Income Tax (PPh)
Bags 15-20% 10% 7.5-10%
Shoes 25-30% 10% 7.5-10%
Textile/Garments 15-25% 10% 7.5-10%
General E-Commerce 7.5% 10% 0%

What this means is, for general e-commerce, you're looking at an import duty of approximately 18.25% of the value of the parcel, compared to around 35-40% previously.

This also means that the 3 special commodities who's market the government is protecting is now observing the following import duty and tax rates:

Category Tax Rates
Bags 35.13-44%
Shoes 46.88-56%
Textile/Garments 35.13-50%

The reasoning for this change is because the different industry in Indonesia have been complaining that since the rise of e-commerce, their goods don't sell as well as online merchants are able to sell at a better price and convenience is a huge factor. Especially for bags, clothes and shoes, the government is looking to protect the local market and imposing the higher import duty and tax rate in an effort to steer Indonesians to purchase locally sold/made goods versus the internationally sourced products.

Only time will tell how this change will affect the e-commerce industry, but we will publish a write-up in greater detail when the regulations have been fully announced and published, and we will also update our Indonesia Guide.

Until then, enjoy your holiday season and Merry Christmas!

#UPDATE 1 (26/12/2019)

Customs Authorities have informed us that the regulations are most likely to be published  in January of 2020 and be in effect within Q1 of 2020

#UPDATE 2 (10/01/2020)

We have just been given the official Regulations document or PMK from the customs authorities. The above regulation has been changed and will be effective on the 30 January, 2020. 30 days from the date of signature of the document, signed 30 December, 2019.