The government will allow an excise duty exemption for ethyl alcohol. (Photo courtesy of the Directorate General of Customs and Excise)

Customs Waives Excise on Ethyl Alcohol, Main Ingredient for Hand Sanitizer


MARCH 20, 2020

Jakarta. Indonesia's Directorate General of Customs and Excise has announced an excise duty exemption for ethyl alcohol, the basic ingredient for hand sanitizer, to help the government as they play catch up with the Covid-19 pandemic

"The Covid-19 outbreak has been declared a pandemic by the WHO. In response, to assist social cause and production of hand sanitizers, surface sanitizers and antiseptic, the government through its Customs and Excise Office has allowed excise duty exemption for ethyl alcohol," a statement from Customs read.

Customs director-general Heru Pambudi said factory or warehouse owners can submit a request for the exemption when ordering from state agencies or non-governmental organizations as long as the ethyl alcohol is going to be used in Covid-19 prevention.

"If the purchase order is made through state agencies, attach a letter from the head of the agency stating the ethyl alcohol will be used for Covid-19 prevention and mitigation. If the order is made through non-governmental organizations, attach a recommendation letter from state agencies that handle disaster mitigation," Heru said in the statement.


Heru has also ordered Customs officials to provide technical guidance on the tax exemption and speed up services to assist the government's handling of Covid-19.

The policy was issued based on a 2019 Finance Ministry regulation and a 2017 Directorate General of Customs and Excise regulation concerning procedures for excise exemption.

Customs also issued a circular letter on March 17 to give guidelines and instructions on the implementation of the excise duty exemption. 

For further information on the policy and its requirements, a hotline is available on 1500225.

Hand sanitizers and other health products, including facemasks, have become sought-after commodities in the wake of the coronavirus outbreak.

Finance Minister Sri Mulyani has said the government would issue a regulation to ensure all ministries and state agencies direct their budget for Covid-19 handling.  

She said one of the first priorities is to overcome the scarcity of medical equipment.

"A presidential decree will be issued for all ministries, agencies and regional governments to use their budget for Covid-19 relief. We have to overcome the scarcity of medical equipment, including hand sanitizers, surgical masks and other personal protective equipment," Sri Mulyani said on Wednesday.

Individuals and organizations have taken matters into their own hands by independently producing hand sanitizers.

For example, chemical engineering students at Serang Raya University took the initiative to produce antiseptic hand sanitizers and distribute them for free to communities around its campus.