ANNOUNCED AS TEMPORARYNo
Internal taxation of imports
On 11 June 2015, the Indonesian Minister of Finance, Bambang Brodjonegoro, announced an increase of the "PPh22" income tax on imported luxury products from 7.5% to 10%. The hike was introduced in order to counterbalance the removal of the country's luxury sales tax for a large number of goods.
Overall, the income tax on imported goods of 16 products was increased from 2.5 to 7.5%, for 128 products from 2.5 to 10%, and for 111 products from 7.5% to 10%.
Brodjonegoro argued that since the luxury sales tax was also being scrapped on the imported goods, the tariffs had to be raised because "we don't want that when we remove the luxury sales tax, people instead 'choose to buy' imports". In the same statement, he stressed: "the goal is to reduce imports on the goods previously covered by this scrapped luxury sales tax" (own translation).
The regulation came into force on 8 August 2015.
The list of affected tariff lines is based on the appendix of the regulation.
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