Heaptalk, Jakarta — The Director General of Customs and Excise at Indonesia’s Ministry of Finance, Askolani, responded to the competitive price of milk imports, which is frequently more affordable than locally produced milk due to exemption from import duties and taxes.
According to his statement, the exemption of import duties on milk imports stems from existing trade agreements between Indonesia and specific partner countries.
“There are free trade facilities between certain nations, and Indonesia has agreed to these terms. This agreement includes duty-free provisions for milk imports,” Askolani conveyed.
Regarding the 0% import duty policy for milk, Askolani indicated that any reassessment would require coordination with the Directorate General of Taxes at the Finance Ministry.
“That would involve our colleagues from taxation,” he clarified.
Earlier, Minister of Cooperatives Budi Arie Setiadi highlighted the high volume of milk imported into Indonesia, noting that the archipelago’s free trade agreements benefit the leading milk-exporting nations, Australia and New Zealand. Upon entering Indonesia, these agreements reduce the price of their dairy products by approximately 5% below the global market rate.
Additionally, Ferry Juliantono, Deputy Minister of Cooperatives, Small and Medium Enterprises (SMEs), has called for revaluating the 0% import duty policy on milk. He argued that this tax exemption has led to an oversupply of imported milk, which the local industry struggles to absorb effectively.
Ferry noted that Indonesia’s milk imports, reaching nearly 4 million tons annually, have increasingly pressured domestic dairy farmers. He emphasized that if the 0% duty policy remains in place, it should be accompanied by robust incentives for local dairy farmers to enhance their competitiveness.
“We need substantial incentives to enable our local farmers to compete, as the cost of producing local milk per liter remains higher than that of imports,” Ferry concluded.
