The Government of Indonesia Lifts Import Duties on 182 Items

The government has lifted import duties on 182 raw materials and other capital goods through the issuance of a ministerial regulation.

"The aim of the removal of import duties on the raw materials and other capital goods is so that downstream industries using these goods can produce competitive products," the acting head of the Finance Ministry's Fiscal Policy Agency, Bambang Brodjonegoro, said on April 27, 2011 in Jakarta.

Bambang explained that the new regulation would affect imported chemical substances such as prophene, ethylene, hydroquinone, hydantoin and carbofuran, which are commonly used in either the cosmetics or the pharmaceutical industry.

Then there are import duty cuts for soybean oil, shortening agents and salad oil for the food industry; as well as weaving machines and sewing machines for the textile industry, among other things.

The machinery industry and the electronics industry are two other industries affected by the new regulation, which took effect on April 18.

"State revenues lost because of the import duty cuts will be compensated through increased foreign exchange as we'll earn with more competitive end products, and by (revenues from) value-added tax," Bambang said as quoted by Antara.