Finance Minister Sri Mulyani said on Tuesday the Finance Ministry, together with the Industry Ministry and Trade Ministry, would team up to identify more than 500 imported consumer goods that could be replaced by local substitutes.
The Finance Ministry’s fiscal policy head Suahasil Nazara said the import reduction measures for consumer goods were under discussion and that the ministry would issue a regulation on the matter.
“We are signaling that imported consumer goods that have locally-produced substitutes would be identified for an additional import income tax or duty,” he said.
Indonesia imported consumer goods worth US$8.18 billion during the first half, up 21.64 percent compared to $6.73 billion over the same period last year, data from the Central Statistics Agency show.
Despite the increase, consumer goods represented a relatively small share of the country’s total imports at 9.19 percent, compared to the share of raw materials and capital goods at 74.67 percent and 16.14 percent respectively.
The rupiah appreciated slightly by 0.16 percent to Rp 14,584 per United States dollar on Tuesday from Rp 14,615 a day earlier. After depreciating in the past few months, the rupiah is facing new pressures from global concerns that Turkey, also an emerging market, is heading toward a serious crisis.
Meanwhile, the current account deficit widened to $8 billion in the second quarter from $5.7 billion a quarter earlier. The latest figure was equal to 3 percent of the country’s GDP.
The deficit in the current account means the country imported more goods and services compared to those it exported, adding to currency vulnerabilities as it needs foreign capital to fulfill demand in the domestic foreign exchange market.