Indonesia's Customs System: Framework, Regulations, and Implementation

International trade policies are continuously influenced by global dynamics. One example is the proposal by U.S. President, Donald Trump, to impose tariffs ranging from 60% to 100% on Chinese goods and a 10% to 20% tax on imports from all U.S. trading partners, including Indonesia, as reported by ABC News. This protectionist approach significantly impacts international trade flows. In this context, Indonesia must also adjust its tariff policies to protect local industries while maintaining competitiveness in the global market.

Indonesia’s customs system encompasses all activities related to the supervision and collection of duties on goods crossing customs territories. Import duties are levied on imported goods, while export duties apply to specific exported goods. Excise duties, on the other hand, are state levies imposed on particular goods due to their specific characteristics, such as the need for controlled consumption, monitored distribution, or the potential negative impact on society or the environment. Examples of excisable goods include ethyl alcohol, alcoholic beverages, and tobacco products. Customs and excise regulations in Indonesia are governed by Law No. 10 of 1995 on Customs as amended by Law No. 17 of 2006 (“Customs Law”) and Law No. 11 of 1995 on Excise as amended by Law No. 7 of 2021 (“Excise Law”).

For imported goods, import duties are calculated based on the customs value, which is determined by the transaction value of the goods. In general, Indonesia’s import duty rates can reach up to 40% of the customs value, with exceptions for certain goods based on international agreements or special policies. The main types of import duties in Indonesia based on Customs Law include:
1. Anti-Dumping Duties (Bea Masuk Anti Dumping): Applied to imported goods whose export prices are lower than their normal value.
2. Countervailing Duties (Bea Masuk Imbalan): Imposed on imported goods receiving subsidies from the exporting country.
3. Safeguard Duties (Bea Masuk Tindakan Pengamanan): Levied on imported goods experiencing a surge in imports, either absolutely or relatively, compared to similar domestic products.
4. Retaliatory Duties (Bea Masuk Pembalasan): Imposed on imported goods from countries that discriminate against Indonesian exports.

Certain exported goods are also subject to export duties, especially strategic natural resources such as leather, wood, cocoa beans, and palm oil products. Export duty rates are calculated as a percentage of the export price or through specific rates set by the government, as regulated under Minister of Finance Regulation No. 38 of 2024 on Export Duty Imposition and Rates for Exported Goods. These duties aim to regulate raw material exports and encourage domestic processing, thereby adding value to Indonesia's economy.

The Indonesian government classifies goods using the international Harmonized System (“HS”) Code, which provides a detailed classification of goods according to international standards. In Indonesia, the Indonesian Customs Tariff Book (Buku Tarif Kepabeanan Indonesia/BTKI) adopts the HS Code with an 8 (eight) digit system, offering additional specifications for national purposes.

In addition to duty collection, Indonesia’s customs system provides certain facilities for eligible goods. For instance, exemptions or reductions in import duties are granted for goods used in research, government projects, or for social purposes. Damaged goods or those with reduced quality may also be eligible for duty refunds.

The Directorate General of Customs and Excise is responsible for ensuring compliance with regulations and supporting efficient and legal international trade. The implemented system aims to balance domestic market protection with enhanced economic competitiveness on the global stage. By adapting to global trends, Indonesia seeks to optimize its customs system to promote inclusive and sustainable economic development.