More so than most other countries, Indonesia is notorious for making people feel at ease by getting rid of rules or laws that most people don’t like, only to slip some even worse ones in there at the same time.
Recently this happened when they announced they would be getting rid of import taxes on alcohol, which most people thought would lower the prices of alcohol. Instead some new regulations were introduced which made the prices of alcohol skyrocket even higher.
Now we are faced with a similar dilemma, as Fiscal tax will be no more as of 2011.
If you are unfamiliar with Fiscal tax
…it is the tax that Indonesians and expats with a KITAS pay when they leave the country. The cost is pretty high at rp 2.5 per person, per exit but if you have an NPWP (taxpayers card), you are exempt from paying this tax.
Basically this is the government’s way of saying, if you have enough money to leave the country, you have enough money to pay your taxes. Not an unfair way of thinking about things, but in a country where almost no one pays taxes it seems unfair to charge the people who might be traveling frequently.
They have announced though that 2011 will mark the end of the Fiscal tax. Sounds good on the surface, but we need to dig down a little deeper to find out what is really going on.
New Customs Tax system
Next year without the Fiscal tax many Indonesians and expats have probably already started to plan their next shopping trip to Singapore and planning what they could spend that rp 2.5 million that they saved on.
Unfortunately Indonesia will be implementing a new Customs Tax system when entering the country of Indonesia with personal belongings. This new regulation states that people entering the country with personal belongings with a total value of over $250 USD will be subject to paying tax on the items. They have also said that the amount will be $1,000 USD for a whole family.
What is not yet clear as whether this will be just for Indonesians, or whether it will include foreigners as well and if so, what are expats on KITAS considered as? Another thing that is still unclear is what items exactly will be taxed. We would hope that they would only tax brand new items brought to Indonesia from abroad, but the way this issue is being reported on it sounds as if all personal belongings will be taxed.
This is where things can get a little tricky because many people have mobile phones and laptops (many of which they actually bought in Indonesia) that easily exceed the quite low limit for personal belongings. If that is true then some people may choose to leave their mobile phone and laptop at home while they vacation, which for some leaves them feeling “naked” without the ability for easy communication. Also it has been reported that there are three different tax tiers for different items and that the highest tier that is present among all of the personal belongings will be applied to everything even if a majority of the items will fall into a lower tier.
To many people this is all sounding very unfair to tax people for these things that they bring into the country, especially if it ends up that they will tax for goods that were previously bought. As with anything in Indonesia, it is always hard to get a definite answer on many of these questions, and really, we are just going to have to wait and see what is going to happen when it is all carried out. I for one won’t be doing any traveling outside of Indonesia until around June 2011, so the information on how things work should be more widespread by then, but I definitely feel for those who are going to have to find out the hard way in January.
Hey there, Your guide is very helpful, Im from Australia and im moving over to Bali to work as a chef towards the end of January. The company I work for is organising KITAS and other documents for me to apply for my visa/permit.
What I am wanting to ask is-
will they try and tax me as I arrive in Bali??
also you didnt cover any info on banking in Bali I will be getting paid in $US, I currently bank with westpac I know there is none over there tho, only commonwealth, If i make a new account with commonwealth over here will I be able to access my bank account there the same way I would here?
Hey Nick, thanks for the response. There is really no way to tell exactly how the new customs rules will be carried out until they actually start enforcing them on the 1st of January. I will make sure to keep things updated with information whenever it becomes available, but it is one of things where we will all just have to wait and see.
As far as banking, thanks for helping me to realize that it is one section that I forgot to cover. for a short answer, since you will have a KITAS, you should have no hassles opening a bank account in Indonesia. I don’t have personal experience with Commonwealth, but my experience with Citibank was that I could access my account at any Citibank here just as if I were back home, so I don’t see why it would be any different with Commonwealth.
Hope this helps for now!
I’m Indonesian but been living in the United Kingdom for a long time. I’m a permanent resident in the UK. Usually I didn’t pay fiscal when I left Indonesia every time I went holiday there because I usually get a free fiscal letter from the Indonesian Embassy in London.
Per your information above, will I be charged with this new customs tax if I bring presents/gifts for my family members back in Indonesia such as laptops, cameras, etc where each item will definitely exceed $250 USD
Will I also be charged when I take/wear my own jewellery that each item is also exceed $250 USD?
I’m looking fodward to knowing your information for my questions above.
Thanks for your assistance on this.
As per the new rules you can expect to pay customs tax for any of the gifts and presents that you bring in over $250. It is not related to the Fiscal Tax in any way, so your exemption from paying the Fiscal Tax will not exempt you from having to pay customs tax.
As for personal effects, I really hope these will not be taxed, as it will have a really negative effect on the way people view Indonesia, but I have still yet to hear any first hand reports, although have some friends arriving today so will make sure to ask them what their experience is with customs.
so it’s march now. how are they implementing the new law? any news?
hello, I did some shopping outside of Indonesia and claimed that I had more than $250 in personal goods on the customs form. The Customs official said I had to pay tax. When I asked how much, he thought about it awhile as if he was picking an amount of money in his mind. Then he said 200,000 rp. I just paid it and have no idea if that was the legal amount or not. If anyone has any idea of what the tier rate is, that would be good to know.
I bumped onto your informative article whilst searching for an answer for ambiguous taxation rules in Indonensia.
I bought some stuffs online and I was charged with exorbitant taxes. Even though my total invoice is only $73.74usd. Its not even half of 250usd fob. How is this possible? Are they charging me illegally? or?