Indonesia to lower threshold for import taxes on e-commerce goods

JAKARTA (Reuters) - Indonesia will lower the threshold at which it begins to impose import taxes on consumer goods sold via e-commerce to just $3, from $75, to control purchases of cheap foreign products and protect small domestic firms, officials said on Monday.

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 to protect firms who've been producing goods that are often traded in e-commerce, such as sandals, crafts, and handbags," said customs director general Heru Pambudi.

Under the new regulations, which will come into effect at the end of January 2020, 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, the official said.

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.

Pambudi told reporters this was in response to the demands of the general public and businesses, and will allow domestic goods to go "head to head" with foreign ones.

(Reporting by Bernadette Christina Munthe; Editing by Jacqueline Wong)