Foreign Minister Asserts Indonesia Cannot Impose Taxes on Malacca Strait, Here's Why!
Foreign Minister Sugiono has stated that the Indonesian government cannot impose levies, such as taxes, on the strategic shipping route of the Malacca Strait. This is because it would not align with the United Nations Convention on the Law of the Sea (UNCLOS) and the principle of international freedom of navigation.
According to Sugiono, Indonesia adheres to and recognises UNCLOS as the foundation of international maritime law, which governs the status of archipelagic states and strategic shipping lanes, making the imposition of taxes in the Malacca Strait impossible.
“So, no. Indonesia is not in a position to do that (impose tariffs in the Malacca Strait),” Sugiono explained when met at the Pancasila Building, Ministry of Foreign Affairs, Central Jakarta, on Thursday, 23 April 2026.
Furthermore, Sugiono noted that Indonesia supports the freedom of navigation and the smooth flow of neutral and mutually supportive trade.
“We also hope for free passage, and I think that is a commitment of many countries to create a free, neutral, and mutually supportive shipping lane, so Indonesia is not in a position to do that; it’s not right,” he emphasised.
Finance Minister Purbaya Yudhi Sadewa had considered imposing taxes on the shipping route in the Malacca Strait, similar to what Iran intends to do in the Strait of Hormuz. He stated that such a policy could be feasible, given Indonesia’s possession of strategic waters, as often mentioned by President Prabowo Subianto.
“And as per the president’s directive, Indonesia is not a peripheral country; we are on the world’s strategic trade and energy routes, but ships passing through the Malacca Strait—we don’t charge them; I don’t know if that’s right or wrong?” Purbaya said at the PT SMI 2026 Symposium in Jakarta on Wednesday (22/4/2026).
Purbaya believes that the concept of taxing the world’s trade route in the Malacca Strait could be implemented through collective cooperation with Malaysia and Singapore, which are also in the region.
“Now Iran wants to charge ships passing through the Strait of Hormuz, they say. If we divide it three ways—Indonesia, Malaysia, Singapore—that would be substantial, right? Ours has the largest, longest stretch,” Purbaya remarked.
Nevertheless, he acknowledged that the concept of taxing the route may not necessarily be feasible and is not easy to realise. Although, the largest portion of the waterway in the Malacca Strait lies within Indonesian territory.
“Singapore is small; Malaysia and us split it in half. If it could be like that, but it’s not. So, with all our wealth, we must not think defensively; we have to start playing offensively. But still measured,” Purbaya stated.