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New duty on digital products deemed bad for business
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Illustration photo of a businessman doing paperwork. (Shutterstock/Flamingo Images)
E
xperts and industry representatives have described a new customs duty on the import of intangible goods as a hindrance to digital adoption, arguing that the extra layer of bureaucracy creates unnecessary administrative hassle and, ultimately, increases costs.
The new obligation is based on Finance Ministry Regulation No. 190/2022 (PMK 190), which stipulates that certain transmitted intangible goods, such as software, operating systems or digital tools electronically, are subject to import duty.
American Chamber of Commerce in Indonesia (AmCham Indonesia) managing director Lin Neumann called the arrangement “potentially bad for business” as it created an “unnecessary level of complexity”.
“I think it’s potentially counterproductive if it continues. We would like to see it not continue,” Neumann told The Jakarta Post on Thursday, adding: “It’s not going to accomplish anything useful.”
Currently, the duty is set at zero percent, meaning that importing parties do not have to pay anything, but that could change at any time.
“At the moment, they say it’s zero duty, so there’s no duty yet, but [it is hard to] imagine why you would put such a regulation in place if you didn’t intend, later, to impose duties,” said Neumann.
PMK 190 also obliges those involved to submit import details and documents to customs authorities, which Indonesia Services Dialogue (ISD) Council executive director Devi Ariyani said was an “administrative burden”, given that firms would have to allocate resources to deal with such filings.
