October 18, 2019 / 8:29 AM / a month ago

Indonesia issues rules to block illegally imported mobile phones

JAKARTA (Reuters) - Indonesia has issued regulations to allow authorities to block smartphones purchased on the black market, in a bid to encourage investors to produce mobile phones in the country, a minister said on Friday.

FILE PHOTO: Airlangga Hartarto, Indonesia's Industry Minister, speaks during an interview with Reuters at his office in Jakarta, Indonesia July 20, 2018. REUTERS/Willy Kurniawan/File Photo

Indonesia is a large market for mobile phone producers, with 60 millions phones sold every year.

“These (regulations) are aimed at creating a level playing field,” Industry Minister Airlangga Hartarto told reporters. “With this policy, investors will continue to enter Indonesia because their industries are protected from the risks of the black market.”

Indonesia is estimated to lose 2 trillion rupiah ($141 million) in potential value-added tax every year from illegally imported mobile phones. The government does not charge import duties on mobile phones.

Under the new rules, which are yet to be made public, phone users will be encouraged to check on a designated website whether their phones were imported lawfully by inputting their International Mobile Equipment Identity (IMEI) number.

Users should register their IMEI within six months from Friday if they fear it may have been illegally imported, officials said.

Indonesians traveling abroad can only bring back two mobile phones and will have to pay appropriate value added taxes. The tax payment receipt would be used to register the IMEI of their foreign-purchased phones.

A person will not be able to use a phone with an unregistered IMEI after the six-month period, said Heru Pambudi, the finance ministry’s customs director general.

The rules will only be applied to phones imported after the rules were signed on Friday.

Brokerage Trimegah Securitas, in a note on Friday, said the rules should be positive for smartphone retailers such as PT Erajaya Swasembada, especially coming just before the latest model of iPhones arrive in Indonesia.

In addition, manufacturer PT Sat Nusaperada could benefit if more mobile phones are assembled locally.

Shares of Erajaya rose 12% by 0751 GMT on Friday with trade volume four times the daily average in the past 30 trading days.

Harjanto, the Industry Ministry’s director general, said there were 34 mobile phone assembly plants in Indonesia that would benefit from the new policy, including one operated by Taiwan’s Pegatron.

Reporting by Bernadette Christina Munthe; Additional reporting and writing by Fransiska Nangoy; Editing by Alex Richardson

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