Government waives import duties on plastic raw materials

Jakarta (ANTARA) - The government has waived import duties on plastic raw materials, setting them at 0 percent to maintain supply and curb production costs for the industrial sector. Coordinating Minister for the Economy Airlangga Hartarto stated during a press conference in Jakarta on Tuesday that several plastic raw materials benefiting from this incentive include polypropylene, polyethylene, HDPE (high-density polyethylene), and LLDPE (linear low-density polyethylene). Previously, import duties on plastic raw materials ranged from 5-15 percent. “All of them are granted 0 percent import duty, but this is given for a period of six months. We will see the situation after six months,” he said. Airlangga explained that the policy is also implemented to maintain price stability in the packaging sector to prevent increases in food and beverage prices. In addition to the tariff policy, the government is adjusting aspects of import licensing. He noted that the Ministry of Industry will compile a list of commodities requiring technical considerations (pertek), while the Ministry of Trade will revise the relevant ministerial regulations on imports. The government is also preparing a service level agreement (SLA) mechanism to ensure transparency and certainty in the licensing process for industry players. The national industry system (Sinas) and strengthening of the Indonesian National Standard (SNI) will also be optimised to make the licensing process clearer, including in terms of time and stages. Currently, Indonesia and many other countries are facing shortages of plastic raw materials such as naphtha. This situation is triggered by supply disruptions due to the crisis in the Strait of Hormuz in the Middle East, which has caused price increases of up to 60 percent and high import dependency, around 55-60 percent. As a follow-up step, the government is also seeking alternative import sources from other countries and increasing domestic supply capacity to reduce dependence on imports.