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Small businesses feel the pinch of new import tax regulation
Finance Ministerial Regulation No.199/2019, which took effect on Thursday, lowered the tax threshold for imported goods to US$3 per item from the previous $75.
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Sunrise flower garden at Barelang bridge of Batam Island in Riau Islands province. (Shutterstock/Dwi Yulianto)
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government decision to lower the tax threshold for imported goods has adversely affected small e-commerce businesses and jastip (individual wholesalers), sellers have claimed.
Dardani Nainggolan from Batam, Riau Islands, had planned to send emping crackers worth Rp 100,000 (US$7.33) to his relatives in Pekanbaru, Riau, but decided not to after considering the fees involved.
“After calculating the tax, I know that sending the chips was not worth it,” Dardani told The Jakarta Post on Friday. “The tax officers assumed the chips were worth Rp 150,000 and they charged PPN [value added tax] plus import duty. But in the end, I decided to cancel the shipment to my relatives.”
Finance Ministerial Regulation No.199/2019, which took effect on Thursday, lowered the tax threshold for imported goods to US$3 per item from the previous $75.
Taxable imported goods will be subject to an import duty of 7.5 percent and a value-added tax of 10 percent. Previously, importers had to pay a 10 percent income tax in addition to the import duty and value-added tax. With the revision, total taxes that must be paid will be only 17.5 percent instead of the previous 27 percent.
As a free trade zone, goods sent from Batam to other parts of the country are subject to import duties and other taxes. With such a status, goods entering Batam from abroad are exempt from customs rules, including import duties and other taxes.
Lisa Athalla, who owns an online cosmetics business, has also had to cancel several product orders outside of Batam due to the import duty and shipment fee.
