Indonesia Raises Import Taxes

Indonesia has raised import taxes on a range of goods in an attempt to support domestic industries and reinvigorate the country's slowing economy.

One of the steepest tariff increases that was announced on July 23 was to the tax on imported meat, which rose from five percent to 30 percent. Tea and coffee imports now face a tax of 20 percent, up from five percent. 

The tax on imported cars has been fixed at 50 percent from its previous range of 10 to 40 percent, while the duty on alcohol has been changed from a fixed rate of IDR125,000 (USD9.31) to 150 percent of the price.

Tariffs were also increased on imported clothes and now range from 15 to 25 percent. Duties have also increased for air conditioning units and carpets.

The Government believes that these measures will encourage consumers to buy locally produced goods, rather than imported products. However, at a time when import tariffs are generally falling, the policy could attract scrutiny from Indonesia's trading partners and lead to the import tax hikes being challenged through the World Trade Organization's dispute resolution mechanism. 

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