Jakarta. Industry Minister Agus Gumiwang Kartasasmita on Saturday called for reforms in the domestic jewelry sector to improve transparency and legal compliance, following the sealing of three Jakarta outlets operated by luxury jeweler Tiffany & Co. over alleged tax and import violations.

The Manhattan-based company is suspected of importing high-value jewelry without proper declaration to Indonesian customs authorities.

While Agus did not explicitly reference Tiffany, he said the government has established a bullion bank to ensure gold circulation enters the formal system, allowing the state and industry to benefit more fully.

“The challenge posed by rising global gold prices should be used as momentum to strengthen Indonesia’s jewelry industry ecosystem. Through bullion banking and transparency-driven policies, we want to ensure a healthier gold economy that delivers optimal benefits for industry and the country,” Agus said in a statement.

A day earlier, Finance Minister Purbaya Yudhi Sadewa said Tiffany & Co was suspected of failing to pay import duties on a significant portion of its jewelry shipments or of not declaring imports honestly.

Based on inspections by Indonesia’s Customs and Excise Directorate, jewelry found at three Tiffany & Co stores in Jakarta was determined to have entered the country illegally and without valid import documentation.

The company was unable to present complete customs paperwork when requested by authorities, Purbaya said. Officials also identified cases of underinvoicing — a practice in which import values are understated to reduce tax liabilities.

“So there were items that were outright smuggled, and others declared through underinvoicing. All of this became clear during inspections,” Purbaya said.

Labor-Intensive Sector
According to Industry Ministry data, Indonesia’s jewelry sector is labor-intensive, supported by more than 500 manufacturers and around 30,000 gold retailers nationwide. The industry recorded exports worth $8.47 billion between January and November 2025.

However, surging gold prices have forced producers to adjust strategies, including lighter product designs and lower karat offerings to keep prices within consumers’ reach.

“The government has observed that rising gold prices are affecting production and marketing strategies, including changes in design, purity levels, and sales patterns,” said Reni Yanita, director general of small and medium industries at the ministry.

Through strengthened bullion banking — currently managed by Pegadaian and Bank Syariah Indonesia — the government hopes to provide the jewelry industry with more stable access to raw materials and broader financing options, Reni said.

Under the system, national gold transactions will be integrated into a structured framework similar to banking.

“If gold circulation enters a structured bullion system, the mechanism will resemble banking. The jewelry industry will have secure access to raw materials, transparency will improve, market confidence will rise, and ultimately the gold sector’s contribution to the national economy will grow,” Reni said.

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