Indonesia: Import Duties on Goods

It is obvious that since leaving hukumonline.com I have been pretty slack at keeping up-to-date with Indonesian legal developments outside of the specific areas that interest me most. As a result, I missed a Minister of Finance Regulation dated 29 October 2010 (in Indonesian). This regulation deals with the duties payable on goods over a certain value that are brought into Indonesia.

What is interesting about this regulation is that it seems to be targeting passengers and getting them to declare all goods on entry. Yet, the last time I traveled to Indonesia I am sure that I had to fill in a Customs declaration form that listed what I could and could not bring into Indonesia and what values they could be before I had to declare them and pay any duties that were payable on these goods.

Is this a case of gaining on the merry-go-round and then losing on the swing? The government will soon be facing a rather large financial black hole when the Fiscal Tax that Indonesians and other permanent residents paid for leaving Indonesia shores is removed. Is this regulation really a not-so-subtle attempt to fill that hole?

The basic framework for the regulation, No. 188/PMK.04/2010, are Articles 10B(5), 13(2) and 25(3) of the Customs Law (Law No. 10/1995 as amended by Law No. 17/2006) If you contact hukumonline.com they might forward you Indonesian Legal Briefs and Indonesian Law Digests that I wrote on this area many years ago. Generally, ministerial regulations are used to facilitate implementation of provisions in superior laws.

The regulation distinguishes between personal effects and commercial goods. This is done with a view to establishing what duties are payable. Personal effects are defined as any personal goods that do not satisfy the elements of being commercial goods.

In essence, anyone that must declare personal effects or commercial goods that they are importing / bringing into Indonesia are to do so. They have up to 30 days prior to the date of arrival or 60 days from the date of arrival to do so. There are some variations in specific circumstances for these time limits. For passengers of an airline this can be done on the day of arrival.

The regulation stipulates in Article 8 that the duty free limits are USD 250 for individuals and USD 1000 for families. For any value over these limits duty is payable. Additionally, it is permissible to import 200 cigarettes, 25 cigars, 100 grams of tobacco and 1 litre of alcohol. As I recall, this is pretty much as it was when I last landed in Jakarta. The duty free limits for cabin crew and airline staff, presumably on official duties, are less than for other individuals.

The system is continues to be a red line (declaring goods) and green line (nothing to declare). The regulation lists in Article 13 all the goods that must be declared irrespective of value and sets a limit on cash that may be carried. The cash limit is IDR 100 million or the equivalent in foreign currency. Where a Customs Officer has any suspicions about a passenger, then that Customs Officer is entitled to conduct a physical inspection of the passengers personal effects. In the event the physical inspection uncovers goods that have not been declared, then the passenger / owner of those goods is required to pay the duty that is due. Receipts for any duties paid must be provided to the passenger paying them.

As far as I can tell the regulation does not expressly provide exceptions for goods that have been owned for more than 12 months. I will need to go and check associated regulations to determine this (I have not downloaded them onto my current laptop). However, off the top of my head I recall that there exceptions applied to goods that had been owned for more than 12 months.

For example, if you were an Indonesian student going to study in a foreign university and took your laptop with you. When you returned in 12, 18, 24, or 36 months time with the same laptop there was no need to declare this as a personal effect that was subject to duty.

An article from Kompas (in Indonesian) that includes some comments from the Director General of Customs at the Ministry of Finance does not provide any insight on this front. The example provided only suggests that a camera that is valued at USD 300 will be subject to duty on the USD 50 that exceeds the USD 250 duty free limit. Unfortunately, the Director General does not note any exception for second-hand goods or goods that have been owned for more than 12 months.

If I find anything relevant to a better understanding of what is subject to duty, outside of what I have noted here, I will post it as a postscript.

The regulation comes into force on 1 January 2011.

Qatar, Doha, and Qatar Airways

I had the pleasure of flying with Qatar Airways all the way from Jakarta to Washington DC. You can probably guess that this is going to be positive in terms of the comments about Qatar Airways.

Qatar Airways bills itself as the 5-Star Airline and this is probably apt based solely on my only experience with the airline and this is in spite of a delay in Doha.

The planes are new so this is always a good start as this means that the comfort level is likely to be good. I was not disappointed on this front. Although, more leg room would never go astray.

The service was first rate. The food was 5-star. It really was like eating at a hotel, Parmesan covered chicken breasts with roast pumpkin and beans...awesome. Even more fun was that when the lights went down there was a self-service option. That is, the staff provided hot and cold sandwiches, as well as drinks. You just meandered your way back to the galley and helped yourself to whatever you wanted - very cool.

The flight was long, so it was nice that the service and food was excellent.

I did not get to see any thing much of Qatar and Doha, except what I could see from the terminal and flying in and out of the airport. However, I got to see more of the international terminal in Doha than I wanted to.

For an international airport that is supposedly a hub for those travelling in the Middle East then it still has a fair way to go on that front. There is probably a litany of complaints in this regard that I should keep to myself, but hey, that would not be me.

For an international airport there is next to nothing in the terms of duty free shopping. There is really only one shop and this is hardly duty free. I was looking at buying a real camera (real being something other than point and shoot) however the duty free price in Doha was the equivalent of IDR 3 million more expensive than what I could pay for it at a legitimate electronics shop.

However, such is life on that front. That, though, was not the big thing for me. The toilets / restrooms were of a quality that made the restrooms at Soekarno-Hatta look like a 5-star joint. Each of the toilet facilities at the terminal required one to have Jesus-like skills, particularly the ability to walk on water. And, at least two of the restrooms were under repair. For me this is just crazy for what is supposedly a 5-star airport. Nevertheless, on the positive side the water was hot which meant there was a certain enhanced cleaning possibility if you know what I mean.

The security at the terminal was interesting to say the least. I am all for enhanced security if this means that I am guaranteed of flying safe. As someone transiting through the airport the security was pretty strict. To get of the plane and into the terminal required all of your stuff to be x-rayed, this included taking off your belt. However, this was ramped up on getting into the lounge to reboard the plane. What made this experience even less fun was that the security staff were scary in an agressive way.

Getting into the lounge required not only the belt to come off again, but the shoes, face towels, hankies, laptops, cameras, coins, keys, mobile phones, and the list goes on. This is part and parcel of an increased security presence however getting shoved against a wall and yeleed at not to move while your stuff goes through the x-ray machine is a little disheartening.

So, in short Qatar Airways service and food was excellent! The terminal at Doha was a little less than expected.