Indonesia considers 20% tax on imported smartphones

7 Apr 2014

The government of Indonesia is considering imposing a luxury goods sales tax on imported high-end smartphones in a move designed to spur growth in the country’s own handset manufacturing segment, which mainly produces low-to-mid-range devices. A report from the Jakarta Post says that authorities are looking at levying a 20% duty on devices priced above IDR5 million (USD441.56). The idea was first floated last year but was dropped following concerns that the tax could lead to an increase in the number of illegally imported handsets. In the interim, there has been an increase in the tax on imported consumer goods, from 2.5% to 7.5%, and for the time being this is considered sufficient to encourage users to buy domestic phone brands, though Industry Minister M. S. Hidayat has confirmed that the 20% levy is one option being discussed to further boost Indonesia’s handset industry.