T

he government’s recent move to lower the non-taxable limit for imported goods sold online has surprised 24-year-old Reva Ayu Nadya, who makes a living by selling Japanese-made Disney merchandise on Instagram.

The limit of non-taxable imported products purchased online has been lowered to US$75 from the initial $100, a policy that will force vendors like Reva to raise the price of their goods. Prior to the change, Reva bore the taxes herself and did not impose them on her customers.

She said she disagreed with the government’s decision.

“I always pay my taxes and I have never gotten any problems — except I always have to wait a long time before I can claim my shipments at the customs and excise office,” Reva told The Jakarta Post on Friday.

Earlier this month, the Finance Ministry’s director general of customs and excise, Heru Pambudi, announced the issuance of Ministerial Regulation No. 182/2018 on imported goods through delivery in a move to safeguard local small and medium enterprises.

Heru said lowering the limit of non-taxable goods could prevent sellers from employing tactics to avoid paying import tax, such as “splitting”.

In splitting, importers divide the shipments of their purchased goods so that each of the shipment’s value will not exceed the taxable limit.

He said importers have been found to have purchased goods online worth $20,000 by splitting them into hundreds of transactions worth less than $100 each.

“Our aim is to prevent this from becoming a trend,” he said as quoted by Kompas.com.

To support the new regulation, the ministry has applied an antisplitting smart system with algorithms formulated to validate and verify parcels sent from abroad.

He said the move was also based on a recommendation from the World Customs Organization (WCO), which found that cases of import tax avoidance had increased as the e-commerce industry continues to grow.

Center for Indonesia Taxation Analysis executive director Yustinus Prastowo said the government did the right thing in lowering the threshold as it would help protect compliant buyers and consumers from fraudulent importers.

Prastowo said the $75 limit was higher than three years ago, when it was $50. The limit was increased to $100 in 2016 in order to boost spending amid slow economic growth.

Nevertheless, Prastowo said the $75 limit was the same amount recommended by the WCO. It is also far higher than the average limit in other countries, such as Thailand at $28 and Canada at $15, he said.

However, Prastowo said the authorities should have a mechanism to distinguish between shipments for commercial and personal use, so that the regulation would not discourage people from buying imported goods.

“The authorities should be able to determine from the recipients’ buying pattern whether they shop online for commercial purposes,” Prastowo said on Friday. “It would be more educational for buyers if they could self-declare their goods as for personal use and give them a legal punishment if they are caught lying.”

According to the directorate general’s calculations, a single shipment worth more than $75, including its cost, freight and insurance, will be subject to three separate fees: a 7.5 percent import fee, a 10 percent value-added tax and an income tax ranging from 2.5 percent to 10 percent.

The regulation, which will take effect on Oct. 10 this year, amended a 2016 regulation, except for imported books.

Another online store owner, 43-year-old Kris, also disagreed with the regulation as customs authorities tended to be lacking people’s trust and that their procedure was rather “complicated”. He said customs authorities often withheld his order for months, even though he always stated his willingness to pay all taxes.