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Indonesia needs higher import duties to protect local online retailers: LIPI
Currently, Indonesia charges a 7.5 percent duty on imported goods worth US$75 or more per invoice.
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Pile it high: Lazada employees pack goods for dispatch at the online shop’s warehouse in Depok, West Java. (Antara/Sigid Kurniawan )
T
he government needs to impose higher duties on imported products to protect local online vendors from cheaper foreign goods, according to the Indonesian Institute of Sciences (LIPI).
The institute suggests the government impose a 10 percent value-added tax (VAT) on all imported products regardless of their value.
Currently, Indonesia charges a 7.5 percent duty on imported goods worth US$75 or more per invoice. This leads importers to evade taxes by splitting invoices, said Nika Pranata, a LIPI economic researcher.
“We suggest that the government apply VAT to all imports regardless of their value to create fairness,” he said during a press briefing in Jakarta on Dec. 13.
Customs and Excise Office data showed that about 90 percent of the products sold in Indonesia’s online marketplaces are imported. The is possible because some of the local online marketplace operators have foreign partners, such as Lazada with Taobao from China and Blanja.com with American online store eBay.
The data also suggested that last year the average amount of imported goods sold by e-commerce rose 10.5 percent per month but their total value only represented 3 to 4 percent of total imports.
LIPI's recent survey on online buyers and sellers showed that 45.96 percent of shoppers said they have bought items directly from e-commerce platforms overseas.
