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In April 2022, the Minister of Finance (MOF) issued MOF Regulation No. 26/PMK.010/2022 on the Stipulation of Goods Classification System and Imposition of Import Duty Tariffs on Imported Goods (“BTKI 2022“), which introduced changes made to the Harmonized Commodity Description and Coding System (HS) Code regime and updated Indonesia’s Customs Tariff Book (CTB). The CTB is amended every five years because the HS, on which it is based, is updated every five years to account for technological developments, changes in trade patterns, and the changing of global situations and conditions.

Changes to Indonesia’s CTB under BTKI 2022 will require conforming amendments to regulations for affected products (some updates have already been made), and to the Indonesia National Single Window System (Sistem Indonesia National Single Window or “SINSW”) databases.

Traders will also have to update affected tariff codes in their databases and commercial documents. However, traders with existing licenses will not have to apply for new licenses with updated tariff codes.

BTKI 2022 has (i) 11,414 tariff codes in Chapter 1 to Chapter 97, (ii) 133 tariff codes in Chapter 98, and (iii) five tariff codes in Chapter 99. In comparison, Indonesia’s previous CTB had (i) 10,813 tariff codes in Chapter 1 to Chapter 97, (ii) 23 tariff codes in Chapter 98, and (iii) five tariff codes in Chapter 99.1

The changes made by BTKI 2022 to Indonesia’s CTB can be summarized as follows:

Chapters 98 and 99, the last two chapters of the CTB, are used to advance the national interest. In Chapter 98, new tariff codes have been added to support the development of (i) the motor vehicles and/or motor vehicle components industries, and (ii) the shipbuilding industry. Chapter 99 is comprised of five tariff headings that specify import duties for software and certain digital products.

(ii) The Impact of BTKI 2022

We have identified several developments that traders should to take into account.

A. Regulations related to Trading Activities

BTKI 2022 will have a substantial impact on regulations on trading activities. The following regulations have been updated with the new HS Codes.

I. Regulations on Anti-Dumping Duties and Safeguard Import Duties

II. Regulations on Free Trade Area (FTA) Agreements, Preferential Trade Area Agreements, and Comprehensive Economic Partnership Agreements (CEPA)

III. Regulation on Export DutiesMOF Regulation No. 39/PMK.010/2022 on The Stipulation of Exported Goods That Are Subject to Export Duties and Tariffs.

IV. Regulation on Income Tax for Payment of Delivery Goods MOF Regulation Under MOF Regulation No. 41/PMK.010/2022 on The Collection of Article 22 Income Tax in Relation With the Payment of Delivery Goods and Activities in the Field of Import or Other Business Fields (amends MOF Regulation No. 34/PMK.010/2017).

V. Regulation on Luxury Goods Sales TaxMOF Regulation No. 42/PMK.010.2022 on the Classification of Motor Vehicles Subject to Luxury Goods Sales Tax and Procedures for the Imposition, Granting, and Administration of Exemptions to and Returns of Luxury Goods Sales Tax (amends MOF Regulation No. 141/PMK.010/2021).

B. Licenses in the Trade Sector

C. Import and Export of Prohibited and/or Restricted Goods

Regulations and databases of prohibited and/or restricted goods in SINSW will have to be updated, and ministries and institutions will have to update their systems and applications.

In addition, the Ministry of Trade (“MOT”) Regulation No. 18 of 2021 on Goods Prohibited from Being Exported and Imported, and MOT Regulation No. 20 of 2021 on Import Policies and Arrangements will also have to be updated.

To avoid unnecessary delays when importing into or exporting from Indonesia, traders should take immediate steps to review their product databases and commercial documents to ensure that they reflect the tariff code changes implemented by BTKI 2022.

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