The fast e-commerce growth in the world has affected Indonesia. Overseas shipments from e-commerce purchases jumped to nearly 50 million packages so far in 2019, compared with 19.6 million packages last year and 6.1 million the year before, with most of the goods coming from China, customs data showed.
This is forcing the Indonesian government to protect local producers by imposing new regulation on import duties and import-related tax within online cross-border trade that became effective on Feb.1, 2020. The new finance ministerial regulation cuts the maximum value of duty-exempt imported goods ordered online to US$3 per delivery note from $75, thereby making it one of the most restrictive measures on online cross border trade.
Under the new regulation, foreign-produced textiles, clothes, bags, and shoes that cost a minimum of $3 will be subject to a range of taxes with a total rate of 32.5% to 50% of their value.
For other products, the import taxes will be lowered from 27.5%-37.5% of their value to 17.5%, as applicable to any goods worth $3.
Goods worth below $3 will still be subject to some taxes, such as value-added tax, though the range would be lower, something that was not required before.