Indonesian Used Clothing Traders Advocate for Import Tax Reinstatement

Historical Context and Current Proposal

The Indonesian Used Clothing Traders Alliance is pushing for the reintroduction of a specific import tax on used clothing, referencing a previous regulation that was in place until 2017. The former regulation, PMK No. 132/PMK.010/2015, established a clear framework for classifying imported goods and imposing import duties. Although this regulation was repealed in 2017, traders believe that reinstating a similar tax structure could benefit the local industry.

Rationale Behind the Proposal

Traders argue that the current tax structure, which includes an 11% normal import tax and a 12% luxury goods tax, is insufficient for regulating the used clothing import market effectively. They contend that a more specific tax on used clothing imports would help level the playing field for local businesses and potentially increase government revenue. The proposal is currently being considered for submission to the government, with traders citing the historical precedent as a basis for their argument.

Implications for the Indonesian Market

The reintroduction of an import tax on used clothing could have significant implications for both local businesses and consumers. For local clothing retailers, a new tax could reduce competition from cheaper imported used clothing, potentially boosting sales of new garments. However, consumers might face higher prices for used clothing, which could disproportionately affect lower-income households that rely on affordable second-hand items.