Indonesia will release a list of goods subject to higher import taxes in the next few weeks, ministers said on Friday (24/08). (Antara Photo/Sigid Kurniawan)

Gov't to Cut 'Red Line' Imports by Half to Improve Port Dwelling Time


JANUARY 10, 2018

Jakarta. Next month, the government will ease imports on a majority of goods that are currently prohibited or severely restricted to accelerate handling processes at ports across the country, Finance Minister Sri Mulyani Indrawati said on Tuesday (09/01).

Despite some fruitful efforts to cut dwelling times at ports over the past few years, an average waiting period of three days is required to clear imported goods. President Joko "Jokowi" Widodo aims to reduce that period to under two days.

Bottlenecks occur at customs, which has limited resources to inspect shipments that may contain 5,229 types of various items currently prohibited or restricted. Those items, which include guns, drugs, rice and used machinery, needs to pass through a so-called red line checking process at ports.

"The directorate general of customs and excise at the Ministry of Finance should not be burdened with the task of checking imported goods that enter as prohibited or restricted," Sri Mulyani told reporters in Jakarta.

Sri Mulyani said the ministry will cut by more than half the number of items currently on the prohibited and restricted list, which now accounts for 48.3 percent of a total of 10,826 types of imported goods.

Only items that are deemed risky, including those from the health, security and environment sectors, will remain on the list and require rigorous inspection by customs officials, the minister said.

Heru Pambudi, director general of customs and excise at the Ministry of Finance, said his office has always verified imported goods within the prohibited or restricted category at border posts. Before a permission is obtained from related ministries, the goods typically pile up ports, awaiting clearance.

Once the new regulation is applied, items that were previously categorized as prohibited or restricted can be verified outside of ports, which will reduce logistics costs as dwelling times at ports will also quicken, Heru said.

"The goods will not need to stay at the border for a long time and can be directed to the warehouses when all conditions are met," he added.

The government released its 15th policy package in June last year to improve the competitiveness of local logistics companies by streamlining and simplifying regulations.

Indonesia aims to reduce its logistics costs to 19 percent of its gross domestic product (GDP) by 2020.

In 2016, Indonesia’s logistics costs accounted for 26 percent of the country's GDP, the costliest in Southeast Asia.

Source: Roland Berger