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Indonesia slaps 150% import tax on spirits

The Indonesian Finance Ministry has increased import duties on spirits to 150% of market value.

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Indonesia has levied a hefty 150% import tax on spirits.

The regulation, which was issued on 9 July and comes into effect today, means that beverages with an AVB of 25-80% will be subject to taxation at 150%.

Imported beverages with alcoholic content of 15-25% will be taxed at 90% of market value.

According to The Jakarta Post, a litre of whisky with a market price of Rp 1 million (about US$74) will now cost Rp 2.5 million (US$186), up from 1.125 million (US$83).

Import duties were previously levied on volume, rather than value.

Local reports suggest the government is trying to bolster the domestic economy as growth slackens to 4.7%, the slowest for more than five years. Import duty has also been increased on clothes, cars and other consumer goods in the apparent bid to aid manufacturing.

While the import tax is set to negatively impact domestic retail and the on-trade, the travel retail can expect to see increased consumer interest.

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