New Customs Tariff Regulation

Date of Post

April 5, 2022

Written by

lemonadecares

On 24th March 2022, the MoF issued Regulation No. 26/PMK.010/2022 concerning Stipulation of Goods Classification System and Import Duty Tariff Imposition on Imported Goods (“PMK-26/2022”).  PMK-26/2022 revokes all previous MoF regulations concerning customs tariff imposition.

Amongst others, PMK-26/2022 stipulates the latest Indonesian Customs Tariff Book (Buku Tarif Kepabeanan Indonesia / “BTKI”) which will officially take effect from 1st April 2022.

Director of Communications and Service User Guidance of the Directorate General of Customs and Excise (“DJBC”), Nirwala Dwi Heryanto explained that BTKI is a document that contains a complete classification structure of goods with the imposition of tariffs for import duties and import taxes, which is a widely used reference both by the government, private and international organizations.

“BTKI contains the goods classification system applicable in Indonesia, including provisions for the interpretation of the Harmonized System (Ketentuan Untuk Menginterpretasi Harmonized System / “KUMHS”), notes, and the structure of the classification of goods based on the Harmonized System (HS) and the ASEAN Harmonized Tariff Nomenclature (“AHTN”),” said the Director of Communications and Service User Guidance at DJBC, Nirwala Dwi Heryanto on Wednesday (30/03).

In BTKI 2022, there are some fundamental changes as compared to BTKI 2017. In chapters 1 to 97 in BTKI 2022, there are 11,414 types of tariff from the previous 10,813 types of tariff. Meanwhile, in chapters 98 and 99, it increased to 138 tariff posts from the previous 28 types of tariff.

The addition of a number of sub-posts in the 2022 AHTN accommodates the strategic interests of Indonesian industry and trade that previously did not exist in the 2017 AHTN, including batik products and several textile products; CPO (Crude Palm Oil) products, and some agricultural products; fish and fishery products; breathing apparatus/ventilator, hospital bed, and several medical devices; products related to the development of the electric vehicle industry, namely electric motors and batteries; and motor vehicles, electric bicycles, and similar products.

Read More:  Tax Treatment of Crypto Asset Trading

BTKI 2022 Provides a Series of Incentives to Increase Trading Capacity for the Next 5 Years

The implementation of the 2022 BTKI not only updates the classification but also provides a special scheme for providing incentives to develop the shipbuilding industry. The policy is the government’s commitment to the economic policy package, for business development and competitiveness of national logistics service providers. “The incentives provided are the imposition of 0% Import Duties for 111 tariff posts for shipbuilding industry components, which were previously subject to tariffs ranging from 5% to 15%,” said Director of Communications and Service User Guidance at the DJBC, Nirwala. Dwi Heryanto on Wednesday (30/03).

Previously, the Fiscal Policy Agency (BKF) of the MoF noted that the development of Indonesia’s shipping industry mostly came from imports of used ships due to lower import duties than shipbuilding components. For this reason, if the government can provide 0% import duty for its components, the Indonesian shipping industry can produce more ships and, in the future, can compete with other countries. In addition, a study from the University of Indonesia stated that this import duty adjustment will encourage potential state revenue from corporate income tax by 74.9%, an increase in production volume by 20%, and an increase in local content by 10%.

In addition to changes in classification and incentives for shipbuilding components, in BTKI 2022 there will also be adjustments to 43 types of tariff in the machinery & equipment manufacturing, chemical manufacturing, other food, and pharmaceutical manufacturing sectors which are combined and have different import duty rates. This adjustment is expected to have implications for an increase in GDP and employment in these sectors.

Read More:  Upcoming Tax Policies for Crypto Transactions

In terms of trade facilitation, BTKI serves as the basis for negotiations in the Free Trade Agreement (FTA), Rules of Origin, and statistical data collection. BTKI also functions to facilitate the monitoring of prohibited and restricted commodities, including products that are considered dangerous for both trade and the public, which is the embodiment of the community protection aspect. Meanwhile, from the aspect of industrial assistance, BTKI functions to facilitate the provision of industrial assistance, for example, the determination of commodities that are exempt from import duties and government-borne import duties (BMDTP).

Periodically every five years, BTKI is always updated to adapt to changes in trade patterns and the latest world situation. In connection with the update, the World Customs Organization (WCO) has issued the HS 2022 amendment to the nomenclature structure of goods grouping at the six-digit level, which is mandated to be enforced worldwide starting January 1, 2022.

Tags:

Table of Contents

Related Articles

An Update on VAT Invoicing

An Update on VAT Invoicing

On 31 March 2022, the DGT issued Regulation No. PER-03/PJ/2022 (“PER-03”) regarding the VAT Invoice arrangements which became effective on 1 April 2022. PER-03 mainly serves as a compilation of several previous regulations related to VAT Invoicing with several...

read more
Tax treatment of Fintech activities

Tax treatment of Fintech activities

On 30 March 2022, the MoF also issued Regulation No. 69/PMK.03/2022 (“PMK-69”) stipulating the Income Tax treatment of interest income in peer-to-peer (P2P) lending, as well as the VAT treatment of Financial Technology (“Fintech”) activities. Fintech is an activity...

read more
Share This