The government exempts import duties on imports of weapons, ammunition, military equipment, including spare parts used in joint military exercises or defense industry exhibitions.

The import duty exemptions are outlined in the Minister of Finance Regulation No. 91/PMK.04/2021 concerning the Second Amendment to the Minister of Finance Regulation No. 191/PMK.04/2016 concerning Import Duty Exemptions on Imports of Weapons, Ammunition, Military and Police Equipment, Including the Spare Parts, as well as Goods and Materials Used to Produce Goods for National Defense and Security Purposes (MoF Reg. 91/2021). This regulation has been effective as of 12 July 2021.

The import duty exemptions are intended to support joint military exercises between Indonesia and defense partner countries that will be held by the government. This is because the government is to organize joint exercises to improve the Indonesian military’s ability to protect the Unitary State of the Republic of Indonesia and introduce Indonesian defense industry products to the international community.

On another note, MoF Reg. 91/2021 has been released to further improve supervision and services through the simplification of systems and procedures for import duty exemptions on imports of goods in the form of weapons, ammunition, military and police equipment, including the spare parts, as well as goods and materials used to produce goods necessary for national defense and security.

Through MoF Reg. 91/2021, the government exempts import duties on imports of weapons, ammunition, military and police equipment, including the spare parts, and goods for national defense and security purposes employed in joint military exercises or defense industry exhibitions.

A detailed list of goods exempt from import duties is outlined in the appendix of the Minister of Finance Regulation No. 164/PMK.04/2019 concerning Amendment to the Minister of Finance Regulation No. 191/PMK.04/2016 concerning Import Duty Exemptions on Imports of Weapons, Ammunition, Military and Police Equipment, Including the Spare Parts, as well as Goods and Materials Used to Produce Goods for National Defense and Security Purposes (MoF Reg. 164/2019).

The list of import duty-free goods includes: special/combat vehicles, such as tanks and armored vehicles; weapons such as infantry, artillery, cavalry; ammunition such as mines, bombs, rockets, guided missiles and their launchers; and airplanes, such as unmanned aerial vehicles or drones.

Goods eligible for exemptions from import duties may be imported by a relevant institution or a third party based on an agreement for the procurement of goods and/or services.

To obtain exemptions from import duties, the importing party is required to apply for import duty exemptions to the Minister of Finance through the Head of the Customs Office where the goods are imported.

The application for exemptions from import duties must at least be attached with:

i.	a military cooperation agreement with a defense partner country or a principle permit from the Commander of the Indonesian National Armed Forces; and
ii.	details of the quantity and type of goods for which import duty exemptions are requested and their customs value which has been approved and validated by an official at the lowest level of medium high officials of the institution concerned.

The application for exemptions from import duties is submitted using the format listed in Appendix III part A of the Minister of Finance Regulation No. 191/PMK.04/2016 concerning Import Duty Exemptions on Imports of Weapons, Ammunition, Military and Police Equipment, Including the Spare Parts, as well as Goods and Materials Used to Produce Goods for National Defense and Security Purposes (MoF Reg. 191/2016). The application for import duty exemptions must also be signed by an official at the lowest level of medium high officials of the institution concerned.

In the event that the application for import duty exemptions is approved, the Head of the Customs Office on behalf of the Minister of Finance shall issue a Ministerial Decree concerning the granting of import duty exemptions. The decree contains details of the quantity, type, and customs value of the goods granted with the import duty exemptions, as well as the designation of the port of unloading.

MoF Reg. 91/2021 outlines that imported goods eligible for import duty exemptions may also be entitled to taxes on import (Pajak Dalam Rangka Impor/PDRI) facilities as per the statutory provisions in the taxation sector.

New Provisions on Import Duty Exemptions on Imports of Weapons, Ammunition, and Military Equipment