Finance Minister Sri Mulyani Indrawati has said her ministry was preparing a ministerial regulation draft to regulate import income tax (PPh) to curb imports in response to the increasing country’s current account deficit (CAD).

“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,” said Sri Mulyani in Jakarta on Monday as reported by kontan.co.id after attending a seminar on palm oil.

“We will also talk to the Industry Ministry and the Trade Ministry as well as Bank Indonesia and the Financial Services Authority [OJK].”

Previously, the Finance Ministry said it would assess 500 import items, mostly consumer goods that could be replaced by local products.

Fiscal policy head Suahasil Nazara even said the import income tax would be imposed on between 600 and 800 goods that were currently being assessed by the ministry.

“We can use import tax income [to control import]. But we will look into the goods first and what policy we can use,” he said, adding that the ministry was also assessing custom tax of consumer goods that were imported.

“We want to see what is on the list of the Customs and Excise [Directorate General], what kinds of goods that have entered Indonesia. The data is needed so that we can curb the import,” he added.

Suahasil stressed that the people were guided to consume domestic consumer goods because the consumption of imported consumer goods would burden the country’s current account.

“What we do is not to stop consumption. We even need to boost consumption, but the consumption of domestic consumer goods,” he added. (bbn)