Jakarta. The Directorate General of Customs and Excise (DJBC) has simplified import duties on eight goods, including books, steel, textiles, and bicycles, reducing the Most Favored Nation (MFN) tariff structure to three categories: 0 percent, 15 percent, and 25 percent.

The policy, set under Finance Minister Regulation (PMK) No. 4/2025, will take effect on March 5. While these commodities will no longer be subject to additional import duties, they will still be liable for value-added tax (VAT) in accordance with existing regulations.

“There are eight commodity groups that previously followed MFN tariffs. With PMK 4/2025, we are streamlining them into just three tariff rates,” said Chotibul Umam, Head of the Import Sub-Directorate at DJBC, during a press conference on Tuesday.

The MFN principle, a cornerstone of multilateral trade, ensures equal treatment of all trade partners.

Under the new regulation, the three tariff categories are as follows:

• 0 percent tariff: Scientific books, which remain duty-free as in previous regulations. Additionally, they are exempt from VAT and income tax.
• 15 percent tariff: Wristwatches, cosmetics, and iron/steel, which previously had tariffs ranging from 0 percent to 20 percent.
• 25 percent tariff: Bags, textiles, footwear, and bicycles, down from previous rates of 5 percent to 40 percent. Off-road bicycles, which were previously subject to a 40 percent duty, will now fall under the 25 percent rate, while children's bicycles will have a lower tariff.

"This simplification makes it easier for importers to calculate duties, compared to the previous complex system," Umam added.

The regulation also aligns with other trade policies, including Trade Minister Regulation No. 8/2024, which governs import restrictions. Additionally, it provides fiscal incentives for Hajj pilgrims, tax exemptions for Indonesian nationals receiving international awards, and enhanced export support through a new shipping consolidation scheme for eligible companies.