Indonesia Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in indonesia, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Trade Barriers
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U.S. stakeholders remain concerned about the tax assessment practices of Indonesia’s Directorate General of Taxes. Key issues include a lack of transparency in the audit process, significant penalties for minor administrative errors, slow dispute resolution, and limited legal clarity due to the absence of binding precedent in Tax Court decisions. Indonesia also applies higher excise taxes to imported alcoholic beverages than to domestic ones. For drinks with 5–20% alcohol content, imported products face a 24% higher tax, while those with 20–55% alcohol are taxed 52% more. Ministry of Finance (MOF) Regulation No. 110/2018 raised withholding taxes on 1,147 imported goods, aiming to curb imports and reduce the current account deficit. MOF Regulation No. 41/2022, effective April 1, 2022, amended this by expanding the list of goods subject to pre-paid income tax at import under Article 22. It added 716 tariff lines taxed at 10%, 1,188 at 7.5%, and seven at 0.5%. Stakeholders report that obtaining refunds for excess pre-paid tax is complex and often takes years.

Corruption remains a major concern for many stakeholders conducting business in Indonesia, despite efforts by the Indonesian Government and the Corruption Eradication Commission to investigate and prosecute high-profile cases. This persistent perception highlights the ongoing challenges in improving governance and ensuring accountability in both public and private sectors. Other barriers include inadequate coordination among government agencies, delays in land acquisition processes for infrastructure projects, and weak enforcement of contracts. Businesses also face an unpredictable regulatory and legal environment, irregular tax assessments, and limited transparency in how laws and regulations are developed and implemented. U.S. stakeholders, in particular, have reported difficulties when seeking legal remedies in contractual disputes. They often face the burden of addressing baseless counterclaims and have expressed increasing alarm over the trend of treating civil contractual matters as criminal offenses,

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Global Business Navigator Chatbot Beta

Welcome to the Global Business Navigator, an artificial intelligence (AI) Chatbot from the International Trade Administration (ITA). This tool, currently in beta version testing, is designed to provide general information on the exporting process and the resources available to assist new and experienced U.S. exporters. The Chatbot, developed using Microsoft’s Azure AI services, is trained on ITA’s export-related content and aims to quickly get users the information they need. The Chatbot is intended to make the benefits of exporting more accessible by understanding non-expert language, idiomatic expressions, and foreign languages.

Limitations

As a beta product, the Chatbot is currently being tested and its responses may occasionally produce inaccurate or incomplete information. The Chatbot is trained to decline out of scope or inappropriate requests. The Chatbot’s knowledge is limited to the public information on the Export Solutions web pages of Trade.gov, which covers a wide range of topics on exporting. While it cannot provide responses specific to a company’s product or a specific foreign market, its reference pages will guide you to other relevant government resources and market research. Always double-check the Chatbot’s responses using the provided references or by visiting the Export Solutions web pages on Trade.gov. Do not use its responses as legal or professional advice. Inaccurate advice from the Chatbot would not be a defense to violating any export rules or regulations.

Privacy

The Chatbot does not collect information about users and does not use the contents of users’ chat history to learn new information. All feedback is anonymous. Please do not enter personally identifiable information (PII), sensitive, or proprietary information into the Chatbot. Your conversations will not be connected to other interactions or accounts with ITA. Conversations with the Chatbot may be reviewed to help ITA improve the tool and address harmful, illegal, or otherwise inappropriate questions.

Translation

The Chatbot supports a wide range of languages. Because the Chatbot is trained in English and responses are translated, you should verify the translation. For example, the Chatbot may have difficulty with acronyms, abbreviations, and nuances in a language other than English.

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