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onsumers in Indonesia may have to pay more for their favorite imported goods as the government is planning to impose an import income tax to curb the worrying level of import growth, which puts more pressure on the country’s current account deficit.

Finance Minister Sri Mulyani Indrawati on Monday said her ministry was preparing a ministerial regulation to regulate import income tax in a move to control the volume of overall imported consumer goods, particularly those that had local equivalents.

“We in the Finance Ministry are still discussing the issue internally involving the Taxation Directorate General, the Customs and Excise Directorate General and the Fiscal Policy Agency,” Sri Mulyani said on the sidelines of a palm oil seminar in Jakarta. “We will also talk to the Industry Ministry and the Trade Ministry as well as Bank Indonesia and the Financial Services Authority [OJK].”

Indonesia saw a whopping increase of 60.75 percent year-on-year (yoy) in imports of consumer goods, totaling US$1.72 billion in July, data from Statistics Indonesia (BPS) show. The figure in July was 70.5 percent higher than a month earlier.

The country’s current account deficit widened to $8 billion in the second quarter from $5.7 billion a quarter earlier. The latest figure was equal to 3 percent of the country’s gross domestic product (GDP).

The deficit in the current account means the country is spending beyond its means, adding to currency vulnerabilities as it needs foreign capital to fulfill demand in the domestic foreign exchange market.

Following President Joko “Jokowi” Widodo’s previous order for measures to stabilize the rupiah and reduce the current account deficit, Sri Mulyani hinted earlier this month at the ministry’s plan to work with the Industry Ministry and the Trade Ministry to identify hundreds of imported consumer goods that could be replaced by local substitutes and issue a regulation on the matter.

The Finance Ministry’s fiscal policy head Suahasil Nazara said separately that the upcoming income tax for imported consumer goods would be imposed on around 600 to 800 items currently being assessed by the ministry. However, there were no details yet on the products.

Data from the Trade Ministry show that China was Indonesia’s largest import partner in the first half of 2018, with a 27.4 percent increase yoy to $24.83 billion. The second- and third-largest import sources, Japan and Thailand, trail very far behind at $10.45 billion and $6.34 billion respectively.

According to data from trademap.org, electrical machinery was Indonesia’s biggest import from China at $7.87 billion, followed by machinery and mechanical appliances at $7.57 billion.

Raw commodities, such as plastics and organic chemicals, ranked the fourth and fifth most imported goods from China in 2017, with a total of $1.35 billion and $1.25 billion. Edible vegetables came in 10th position with a total of $606.25 million.

Trade Minister Enggartiasto Lukita said on Monday it would not be easy for the government to identify imported Chinese goods that could be substituted by locally made products, as there were hundreds of thousands of categories of each product.

Nevertheless, Enggartiasto said his ministry, along with the Industry Ministry and the Finance Ministry, would discuss and decide the possible local substitutes for imported products from all Indonesia’s trading partners.

Indonesia’s annual trade deficit against China has increased significantly in the past several years. Data from the Trade Ministry show the largest increase was an 80 percent jump in the trade deficit to $13 billion in 2014 from only $7.2 billion in 2013. Since then, Indonesia’s annual deficit against China has been hovering between $12 billion and $14 billion.

Between 2013 and 2017, while imports from China only increased by 3.74 percent on average every year, Indonesia’s exports to the East Asian country declined by 0.5 percent annually, the data show.

When asked for comments, Shinta Kamdani, vice chairwoman for international relations at the Indonesia Chamber of Commerce and Industry (Kadin), said it was not possible for Indonesia to entirely exclude itself from Chinese products because of the former’s weak position in the global supply chain.

However, she acknowledged that Indonesia still had high competitiveness in raw commodities, agriculture and low-technology imports, such as organic chemicals, fruits and aluminium.