Increase of income tax 22 reduces imports of luxury goods

Jakarta (ANTARA News) - The Directorate General of Customs and Excise of the Ministry of Finance said the increase income tax 22 (PPh 22) imposed since September 13, 2018 has cut luxury goods imports by 9.9 percent.

"There is a reduction in the importation of luxury goods in the Sept 13-Nov 11 2018 period compared to that in the Aug 13-Oct 11, 2018 period, from US$364.15 million to $328.11 million," Director General of Customs and Excise Heru Pambudi said in Jakarta on Thursday.

Heru said decline could be seen from the decline in import foreign exchange from the luxury goods group, which experienced a rate increase from 7.5 percent to 10 percent. It went down from 10.27 million US dollars before the imposition of the tariff increase to 5.46 million US dollars.

The decline in import foreign exchange was also seen in the auxiliary materials group which experienced a rate increase of 2.5 percent to 7.5 percent and the consumer goods group that experienced a rate increase of 2.5 percent to 10 percent.

Import foreign exchange of the auxiliary materials group fell from US$15.99 million to US$ 9.65 million and import foreign exchange of the consumer goods group fell from US$4.85 million to US$3.22 million.

Overall, the average daily import foreign exchange from the previous January 1-September 12 period was down from US$31.1 million to US$18.3 million in the September 13-November 11 2018 period.

"The decline in the average daily import after the imposition of the policy was 41.05 percent," Heru added.

Previsouly, the government raised 22 PPh import tariffs and required the use of biodiesel (B20) at home to reduce imports and the current account deficit.

Source: ANTARA News

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