Government Continues Smartphones Sales Tax Imposition Plans

Ilustrasi (dok)

JAKARTA (IndoTelko) - The discourse on Sales Tax on Luxury Goods plans for smartphones that have been stagnant earlier is now under discussion again.

"The Sales Tax on Luxury Goods for smartphones is under the Finance Ministry's discussion. We are now discussing on the proper smartphone price to be imposed by the luxury goods tax. I would be starting on the price of US$ 1000, but the Finance Ministry said to start US$500. It's still being discussed," said Minister Rudiantara, yesterday.

The Sales Tax on Luxury Goods plans for smartphones plan has been ongoing since 2013 which become a hot discussion topic among the government and the business players.

If the discourse is implemented by the government, then about 37.5% tax would affecting smartphones’s price. In detail, 20% for luxury sales import VAT Tax (10%), and imports income tax (7.5%). As a result, the total levy to be paid is approximately 37.5% and is charged to the buyer.

If the Luxury Goods Sales Tax for Smartphones implemented then the consumer will bear the additional 20% due to 30% increase of retail price.

Indonesian Mobile Association (APSI) estimated that not only increase the buyer's price but also smuggled products are expected to flood into the market. It is estimated that 50% of mobile phones in Indonesia comes from contraband and bring the potential loss of Rp 5 trillion per year.

During last year's discourse, the luxury tax was not only for the import of mobile phones, but also for locally made. In fact, to produce mobile phones in the country, raw materials and components are subjected to 5% to 15% import duty.

A number of research institutes mentioned that smartphone shipments to Indonesia this year will reach 50 million units. (es)