The escalating environmental damage has prompted urgent action from the Indonesian government. In a significant move to address this issue, Finance Minister Sri Mulyani Indrawati has announced a new policy aimed at waiving import duties on equipment and materials essential for preventing environmental pollution.
Effective from August 4, 2024, this policy is formalized in the Minister of Finance Regulation (PMK) No. 32/2024, signed on May 20, 2024.
Sri Mulyani stated, “Upon the implementation of this regulation, the previous Minister of Finance Regulation No. 101/PMK.04/2007, which covered the waiver of import duties on equipment and materials for preventing environmental pollution, will be repealed and deemed invalid,” as quoted on Thursday, August 8, 2024.
Nirwala Dwi Heryanto, the Director of Communication and User Guidance at the Directorate General of Customs and Excise (DJBC), emphasized the importance of this policy for businesses. The new regulation is designed to provide legal clarity and streamline the import process for equipment and materials used to combat environmental pollution.
The updated regulation introduces several critical changes that importers need to be aware of, including the identification of eligible recipients and objects, the involvement of third parties, and the requirements for applying for the duty exemption.
Eligible items under this policy include equipment such as installations, machinery, and parts used for monitoring, processing, and/or managing waste, as well as materials including physical, biological, and disposable chemical substances used for these purposes.
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Nirwala clarified, “The recipients of this facility are legal entities established within the Republic of Indonesia.” These entities may include those whose manufacturing processes generate waste, such as factories, or organizations like hospitals and laboratories that produce waste, as well as those specifically focused on waste management.
The regulation also allows for third-party involvement in importing equipment and/or materials. If a business cannot handle direct imports, they must enter into an agreement or contract for the procurement of these items. To benefit from the import duty exemption, both businesses and third parties must submit an application with a recommendation from a senior official in the ministry responsible for environmental protection and management.
Nirwala concluded, “The waiver of import duties is a crucial measure by Customs to support environmental pollution prevention and the preservation of nature. We hope businesses across Indonesia will take full advantage of this facility.”
