Newest Import Duties in Indonesia: 2024 Update

A new governmental regulation stipulates that import duties in Indonesia have been effective since January 30, 2020. This regulation is the Finance Ministerial Regulation (PMK) No.199/2019, and it was enacted to reduce the maximum value for imported goods to be tax-free.

According to PMK 199/2019 issued by the Ministry of Finance, the maximum value of tax-free items for import into Indonesia will be decreased from US$75 to US$3 for each recipient and shipment.

Import Tax Regulations in Indonesia

Furthermore, all taxable goods for import into Indonesia have a 7.5% import duty and a 10% value-added tax. Before the implementation of PMK 199/2019, a 10% income tax applies to taxable goods and the value-added tax and import duties in Indonesia.

Therefore, thanks to these new regulations, importers must only pay 17.5% for taxable items for import into Indonesia – 9.5% fewer than the previous 27%.

Nonetheless, the regulation does not apply to certain products imported into Indonesia, such as shoes, bags, and garments. As a result, E-commerce businesses are now optimistic that this new policy will bring in more sales, improve local businesses, and decrease the country’s trade deficits.

The Exception: Batam

PMK 199/2019 applies to all regions in Indonesia. However, Batam remains a controversial region due to its status as a free trade zone area, and all goods imported into Batam are not subject to import taxes in Indonesia 2024 and Indonesia import duties – unless the goods are further distributed to other Indonesian regions from Batam.

Therefore, to continue bringing more foreign exchange to Indonesia with the international trade traffic in Batam, PMK 199/2019 only applies to imported goods released from Batam to other Indonesian regions.

Free Trade Agreements and Import Tariffs in Indonesia

In addition to the above, import tariffs from countries with trade agreements with Indonesia will differ. The first is import tariffs between Australia, New Zealand, and ASEAN countries. The second one is between South Korea and ASEAN countries. The third one is between India and ASEAN countries. And the fourth one is between China and ASEAN countries.

How to Start an E-commerce Business in Indonesia

The imports into Indonesia jumped from 19.6 million items to 50 million in just a year between 2018 and 2019. Therefore, e-commerce is a potentially massive industry in Indonesia that is hard to overlook.

For investors to start an e-commerce business in Indonesia, here’s the summary of the requirements and obligations:

Requirements to Start an E-Commerce Business in Indonesia

• Obtain a business license via the Indonesian Online Single Submission System
• Obtain technical licenses and taxpayer numbers and comply with other business requirements
• Assist in governmental programs
• Give honest, complete, and valid information to the authorities—for instance, the electronic system, service conditions, guarantees, identities of legal subjects, etc.

Obligations for Customer Protection

E-commerce businesses are obliged to comply with the following related to customer protections:

• Customer complaint procedure, including the follow-up mechanism
• The customer’s address and phone number
• Complaint handling from a competent person
• The time necessary for complaint settlement

What Are The Types of Prohibited Goods Import in Indonesia

Prohibited goods for import in Indonesia encompass a wide range of items and categories, and these restrictions are imposed for various legal, safety, environmental, and public health reasons. The specific list of prohibited goods can change over time due to evolving regulations and government policies.

• Narcotics and Psychotropic Substances
• Firearms and Ammunition
• Hazardous Materials
• Endangered Species and Wildlife Products
• Counterfeit Goods
• Obscene Materials
• Gambling Devices
• Radioactive Materials
• Plants and Plant Products
• Pharmaceuticals and Medications
• Food and Beverages
• Cultural Heritage and Antiques

It’s important to note that the list of prohibited goods can change over time, and new regulations can be introduced. Therefore, importers and businesses must stay informed about the latest customs regulations and consult with Indonesian customs authorities or legal experts. Violating these prohibitions can lead to legal consequences, including fines, confiscation of goods, and imprisonment.

How does the Customs Clearance Procedure Work in Indonesia?

In the realm of international trade, customs clearance is a fundamental process. It ensures that goods can move seamlessly across borders while adhering to the regulations and requirements of the importing country. As a key player in global trade, Indonesia has well-established customs clearance procedures in place. 

Step-by-Step Procedure

The customs clearance process in Indonesia is a well-structured sequence of steps. It begins with the submission of necessary documents, followed by an examination of the cargo, an assessment of duties and taxes, and ultimately, the release of goods once all requirements are met.

Customs Duties and Taxes

Importers are often required to pay customs duties and taxes on their imported goods. These charges may vary depending on the type of goods and their value. Accurate assessment and payment of these duties are essential to avoid delays and legal issues.

Customs Valuation

Customs authorities in Indonesia determine the value of imported goods to assess taxes and import duties Indonesia. This valuation process is crucial for establishing the correct financial obligations of importers.

Inspections and Examinations

Inspections and examinations are part of the customs clearance process to ensure that the goods match the descriptions in the provided documentation. These may include physical inspections of the cargo or document reviews.

Compliance and Declarations

Importers must make accurate and truthful customs declarations. Falsifying information or attempting to evade customs duties and taxes can lead to severe consequences. Compliance with customs regulations is crucial.

Let InCorp Indonesia Assist You

You can import into Indonesia and set up an e-commerce business quickly if you have the proper guidance to help you with all the business registration and incorporation formalities. At InCorp Indonesia (formerly Cekindo), we can guide you through the requirements of import duties in Indonesia.

The expert team at InCorp Indonesia will handle all your business incorporation needs with professional guidance and expansive connections.

We understand many things are happening while setting up a company in Indonesia. Therefore, as a business owner, you are not in a position to deal with all these complicated rules and regulations you must abide by.

But don’t worry – InCorp Indonesia has everything you need to start your business in Indonesia. Contact us by filling in the form below, and one of our business incorporation specialists will guide you through all the processes.