New Incentive: Prabowo Scraps Import Duties for MRO and Petrochemical Industries

The government has officially abolished import duty tariffs for certain goods used by the Maintenance, Repair, and Overhaul (MRO) industry and for Liquefied Petroleum Gas (LPG) as feedstock for the petrochemical industry. The policy, part of the Semester II 2026 Economic Stimulus Package, is expected to cut production costs and maintain the competitiveness of the national industry amid global economic pressures. “This policy is part of the Government’s efforts to maintain economic growth momentum by strengthening the real sector. Through production cost efficiency, industry players are expected to have greater room to invest, increase production capacity, and strengthen competitiveness,” said Coordinating Ministry for Economic Affairs Spokesperson Haryo Limanseto in a statement on Saturday, 25 July 2026. The policy is set out in Minister of Finance Regulation (PMK) Number 50 of 2026 as a follow-up to President Prabowo Subianto’s directive to help businesses face global economic pressures that are driving up production costs. With this fiscal incentive, the government hopes businesses can sustain their activities, improve efficiency, and maintain competitiveness in both domestic and international markets. For the MRO industry, the government has set a 0 percent import duty tariff for goods and materials used in aircraft maintenance and repair activities. This incentive is expected to reduce companies’ operational costs so that domestic aircraft maintenance services become more competitive and can hold their own against MRO centres in other countries. A similar incentive is also provided to the petrochemical industry through the elimination of import duties on LPG used as production feedstock. The reduction in raw material costs is expected to increase the efficiency of the petrochemical industry, which in turn will help lower production costs for other manufacturing sectors that depend on petrochemical products. The policy is regulated in PMK Number 50 of 2026 concerning the Third Amendment to PMK Number 26/PMK.010/2022. The regulation was enacted on 15 July 2026 and comes into effect seven days after its promulgation. Specifically, the 0 percent import duty facility for LPG imports as feedstock for the petrochemical industry is valid for six months through tariff codes 9845.10.00 and 9845.20.00.