Used Clothing Traders Seek Legalization and Taxation Framework

Petition to DPR Includes Proposed Tax Structure

Used clothing traders in Indonesia have formally requested the House of Representatives (DPR) to legalize their business operations and implement a structured taxation system. The proposal, presented by the Aliansi Pedagang Pakaian Bekas Indonesia, includes a comprehensive tax framework designed to bring the industry into regulatory compliance.

Key Elements of Proposed Taxation

1. Import Duty (Bea Masuk): 7.5% calculated on Cost, Insurance, and Freight (CIF)
2. Value Added Tax (PPN): 11% as per current Indonesian tax regulations
3. Used Clothing Tax: Proposed rate between 7.5% to 10%
4. PPh 22 Import Tax: 7.5% on imported goods

The traders have acknowledged that their current business practices have been operating outside legal boundaries since the 1980s. WR Rahasdikin, Chairman of the Aliansi Pedagang Pakaian Bekas Indonesia, stated that while they were aware their activities were illegal, they are now willing to comply with regulations and taxation if their business is legalized.

Historical Context and Future Implications

The used clothing trade has been a significant informal business in Indonesia since the 1980s, with many traders operating without proper legal status or tax compliance. The proposed legalization and taxation framework represents a significant shift in the industry's relationship with regulatory authorities. If implemented, this framework could potentially bring substantial additional revenue to the government while providing legal protection to thousands of traders currently operating in the informal sector.

Challenges and Considerations

While the proposal offers a pathway to legalization, it also presents challenges for both the government and traders. The implementation of such a taxation framework would require careful consideration of its impact on both the formal and informal economy, as well as the potential resistance from various stakeholders.