Indonesia proposed plastic bags taxation, implementation date undetermined

The Indonesian government has proposed to levy the use of plastic bags in the country, however, the implementation date has yet to be determined. 

In the proposal, the targeted product for taxation focuses on plastic shopping bags with a thickness of 75 microns and lower. Other products including plastic bags in the form of rolls for fruit/vegetables/meat (barrier bags), product packaging bags (produce bags), laundry bags, crop and fish cultivation bags are excluded.

A levy of IDR 300,000/ton ($21/ton) would be imposed on the targeted product. Local manufacturers are required to clear the tax after the sales of the product while importers would have up to 45 days from the customs clearance date to submit and pay for the levy before any form of penalty takes place. 

Companies must register for the Business Identification Number for Excise (Nomor Pokok Pengusaha Barang Kena Cukai – NPPBKC) 90 days from the official announcement date. 

The government informed that revenue from the tax would be used for pollution management, environmental recovery, development of the plastic recycling industry and innovation of plastic bag replacement.

Companies are exempted from the tax if the product is manufactured for export or use as an intermediate to produce other products.