Indonesia may tax all mobile phone imports

Dylan Bushell-Embling
08 Apr 2014
Daily News

The Indonesian government is considering imposing a tax on all imports of mobile phones, while the introduction of China's value-added tax (VAT) on telecom services has been delayed.

Indonesia's trade ministry has previously announced plans to impose a 20% luxury tax on smartphones priced higher than 5 million rupiah ($440), Jakarta Dailyreported.

But the ministry has now taken the view that every mobile phone is categorized as a luxury good, and should be taxed accordingly.

Industry minister MS Hidayat has also revealed that his department is still brainstroming the floor price of mobile phones that should be taxed, stating that it is possible that all devices will be affected.

The initiative is reportedly designed to spur growth of the domestic mobile phone industry.

Meanwhile in China, the introduction of a trial VAT on mobile services may be delayed until June 1, China Times said.

China's finance ministry had originally intended to commence the planned VAT trials on April 1, but this date has come and gone without China's big three operators receiving notice of a tax policy change.

The trials are expected to use two different VAT rates – 6% and 11%. The VAT is designed to replace an existing 3% business levy based on operators' gross revenue.

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