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Govt's import tax plan faces backlash from merchants and buyers
Merchants and buyers are objecting to welcoming the New Year with a new policy that essentially hikes tax on goods imported for sale on e-commerce platforms.
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An employee of Lazada fills an order at the online marketplace's warehouse in Cakung, East Jakarta, in this file photo. (Kompas/Hendra A. Setyawan)
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he government's plan to lower the tax threshold for e-commerce retail imports is facing a backlash, with merchants worried that the new policy will cause a sharp decline in sales.
Mustika Rahma, a 23-year-old e-commerce merchant that retails on Instagram and several online marketplaces, told The Jakarta Post on Thursday that the new policy would discourage buyers from purchasing imported goods because they would have to pay a higher import tax.
"We feel threatened by this regulation because sales will go down as prices skyrocket," said Mustika, who sells 100 percent imported fashion items and accessories.
She added that her online store had recorded a spike in sales following the government's announcement: "I think customers are taking advantage of the opportunity before prices go up."
"The good thing about the regulation is that we will no longer need to play cat and mouse with the customs office, since we [e-commerce merchants] are being recognized by the government," Mustika added.
Starting in January 2020, the government is imposing a lower tax threshold of just US$3 (Rp 42,000) on consumer goods imported for retailing on e-commerce platforms, from $75 previously. The measure is aimed to protect locally made products from cheaper imported goods.
In addition to reducing the tax threshold for e-commerce retail imports, the government only impose import duty of 7.5 percent and value-added tax of 10 percent on e-commerce retail imports . Previously, besides import duty and value added tax, imported goods were also subject to 10 percent income tax.
