Subject to MFN Tariffs: What are the Trends in Indonesian Cosmetic Imports?

Cosmetics are among eight commodities that will be subject to the most favored nation (MFN) tariff for import duties and taxes.

According to *Katadata*, this decision is stipulated in Minister of Finance Regulation (PMK) Number 96 of 2023 concerning Customs, Excise, and Tax Provisions on the Import and Export of Consignment Goods. This regulation will come into effect on October 17, 2023.

Director of Customs Technical at the Directorate General of Customs and Excise (DJBC), Fadjar Donny, revealed that four commodities have been added to the MFN list. He stated that this aims to support the growth of the domestic industry.

Previously, based on PMK Number 199 of 2023, only four commodities were subject to the MFN tariff: textiles and textile products with import duties of 15%-25%, footwear with import duties of 25%-30%, bags at 15-20%, and books at 0%.

PMK 96/2023 adds four commodities: cosmetics with a 10%-15% duty; iron and steel 0-20%; bicycles at 25%-40%; and watches at 10%.

"Because we see that based on trade transactions, especially cosmetics, it is very high. We also see bicycles and watches, based on statistics, as commodities with high demand due to current trends in society," said Fadjar Donny, explaining the reason for adding these four items, in Jakarta, Thursday (12/10/2023).

Meanwhile, what is the trend of Indonesian cosmetic exports and imports over the past five years?

Data from the Central Statistics Agency (BPS) calculates the export and import of cosmetics along with essential oils and fragrances.

In July 2023, these three commodities recorded exports of 9.66 million kilograms (kg). Imports amounted to 8.57 million kg.

The value of exports of cosmetics and related products reached US$73.43 million or Rp1.15 trillion (assuming an exchange rate of 15,681 per US$). Import value was significantly higher, at US$134.98 million or Rp2.11 trillion.

July 2023's exports and imports, covering only half the year, were considerably higher than the 2022 figures. In 2022, export weight was only 8.84 million kg and imports were 6.71 million kg.

Exports and imports in 2021 were higher than in 2022, with exports at 10 million kg and imports at 8.57 million kg.