Duty/tax-free shopping for tourists is coming to Indonesia, sort of.

It is now possible to avoid paying tax in Indonesia, not by bribing someone at the Indonesian Tax Office, but legally.

Gayus Tambahan
He allegedly helped many people avoid paying tax.
However, this is one scheme he can’t assist on.

As reported recently in The Jakarta Post, Indonesia is expanding a trial system of duty/tax-refunds for tourists.

All visitors need to do is:

1. Go to one of these shops participating in the scheme:

Stores with “VAT Refund for Tourist”

Jakarta: Pasaraya Blok M, Sarinah Thamrin, Metro Pondok Indah Mall, Metro Plaza Senayan, Keris Gallery at Terminal 2D’s Soekarno-Hatta international airport, Batik Keris Citraland, Batik Keris Menteng, Batik Keris Pondok Indah Mall 2, Batik Keris Pacific Place, Keris Department Store Menteng, Keris Department Store Puri Indah Mall, Jean Paul Gaultier Plaza Indonesia, Christian Louboutin Plaza Indonesia, Club Monaco Plaza Indonesia, Sogo Plaza Senayan, Sogo Kelapa Gading, Sogo Pondok Indah Mall, Sogo Emporium Pluit, Seibu Grand Indonesia, and Alun-alun Indonesia Grand Indonesia.

Tangerang: Batik Keris in Supermal Karawaci

Bali: Batik Keris at Discovery Shopping Mall, UC Silver in Batu Bulan, Gianyar, Mayang Bali in Kuta, Sogo Bali Collection, Sogo Discovery Shopping Mall, Alun-alun Indonesia Nusa Dua, Batik Keris at Ngurah Rai airport, Atlas South Sea Pearl in Sanur, Dewis in Sukawati, Gianyar and Windu Sari in Batu Bulan, Gianyar.

     
Two of the many choices

2. Spend a cool Rp5 million.

3. Depart Indonesia within 30 days of purchase and reclaim the 10% tax from the registered tax refund counter at Jakarta’s or Bali’s airport, after passing immigration.

This system has a few limitations and disadvantages compared with e.g. the tax refund for tourists scheme that operates in Singapore:

– You have to spend a lot more money to qualify for a tax refund.

Rp5 million is a lot of souvenirs and batik shirts. In Singapore, you have to spend a relatively small $S100, at the current exchange rate about Rp700 000.

The current BI exchange rate for $S1.
Multiply the figure on the left by 100 to get the current value for $S100 in Rp.

To work out Rp5 million in other currencies (e.g. $US, €, £, etc) use the Bank Indonesia Exchange Rate calculator.

– You can only get the refund when leaving Indonesia, and only in Rupiah cash or bank transfer.

     
Option A: Indonesian Rupiah Cash         Option B: Bank Transfer

Receiving Rupiah cash just before you leave the country isn’t much use. You will have two options. Firstly, visiting a moneychanger at the airport (whose exchange rates aren’t great). That assumes the moneychanger has stock of the foreign currency you seek; they may not. Alternately, you could keep it for next time – if there is one.

In Singapore, there are other options: you can receive a refund directly upon purchase (either as a discount or as a cash refund), or do it via snail mail.

In addition, Singapore dollars are more widely accepted by moneychangers in the region than Indonesian Rupiah, probably because the currency is more stable.

As for the bank transfer option, it seems unlikely most foreign visitors are going to brink their bank details. Even if they did, they’re not likely to know e.g. their bank’s SWIFT code.

– Certain items which could be cheaper in Indonesia than the goods’ destination country (or unique items not available in other countries) are excluded.

Some of the products on the blacklist include: food, beverages and tobacco products. Also on the “no-fly list” are guns, explosive goods and any materials that are not allowed to be taken into an aircraft. (Side issue: I didn’t know you could bring guns and explosive goods on an aircraft in Indonesia).

Sorry, you cannot claim a tax refund on this item

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So, the question is this: Do you think that with these limitations the tax refund for tourists scheme is a waste of time/money? (In the first six months, there were only 46 claims, totalling Rp41 million).

Please add your vote “YES” or “NO”, preferably with a reason. Other comments are also welcome.