Import Tax on Alcohol Increase to 150%

Liquor, beer, and wine drinkers will have to pay more than double the price for imported drinks in coming months after the government raised import tariffs.

The Indonesian Finance Ministry today put into effect a new import duty system that could lead to dramatic increases in the price of alcoholic drinks in Indonesia.

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In a regulation issued on July 9, the Finance Ministry stated that any beverages with alcohol content of less than 80 percent, such as brandy, whisky, vodka, gin and rum, will be charged import duties at 150 percent.

“The regulation is effective 14 days after it is issued,” a statement from the Finance Ministry says.

Under the previous regulation, import duties were based on volume, at around Rp 125,000 (US$9.31) per liter. Under the current regulation, duties will refer to price value.

For example, a liter of whisky with a market price of Rp 1 million cost 1,125,000 under the previous regulation, while under the new rule, the price will swell to Rp 2.5 million.

Other alcoholic beverages of less than 15 percent alcohol volume in a tw0-liter units will be subjected to a 90 percent import tariff. Currently they are subjected to a Rp 55,000 import tariff per liter. Malt beers are subjected to a Rp 14,000 import tariff per liter.

Heru Pambudi, the Finance Ministry’s director general of customs and excise, said on Thursday the new regulation was meant to promote the growth of local brewers by balancing the supply from local factories with imported goods.

Following the news, the share price of Multi Bintang Indonesia, Indonesia’s biggest beer producer and local unit of Dutch brewer Heineken, rose 1.8 percent to close at Rp 7,000 at Indonesia Stock exchange, amid 0.1 percent decline of the market’s benchmark index.

BPS data showed Indonesia’s import on beverages with alcohol content — from sparkling wine, wine, sake, brandy, whiskey, rum, gin and vodka — in 2014 reached 2.6 million kilograms or worth $13.1 million, but only accounted for 0.007 percent of overall imports in 2014.

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