Indonesia will increase import tax rates on manufacturing products

According to a report by the “Jakarta Post” on December 19, the Indonesian government is evaluating the feasibility of increasing the import tax rate for some industrial products, covering 741 of the 10,000 existing tax numbers, mainly including textiles, downstream Chemical products, basic metals, vehicles, etc. The Indonesian Ministry of Industry stated that the import tax rate for industrial finished products should be higher than the import tax rate for raw materials and intermediate products to make the tariff rate structure more reasonable. The current average import tariff level in Indonesia is 6.8%, which is lower than other emerging market countries, such as China (9.6%), Brazil (13.7%), and India (13%). Indonesia’s average tariff on industrial products is 6.6%, which is lower than China (8.7%), Brazil (14.2%), and India (10.1%).
Latif, an economist at the Indonesian Academy of Sciences, said that this measure is very necessary. Lower import tariffs make imported industrial products more competitive and flood the domestic market. He hopes that the government will also lower the import tax rate on raw materials.