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Paying taxes not for Batam BATAM - Because of the relative closeness of the free world - everything is relative - that is called Singapore, you will find all kind of products on Batam up for the grabs. Of course you should make sure that you are buying the real stuff, but generally spoken you will, but without the hefty import duties Indonesia puts on luxury imported goods.

Electronics can often be purchased on Batam cheaper than you can in Singapore (where you will have to pay import duties and taxes on your purchase, claiming a VAT refund is possible but rarely claimed). Be sure to check the cables because Batam and surrounding areas use the British three-pinned connector, while the rest of Indonesia uses the two-pin one. You can of course buy a correct adapter as well.

After electronics, perfumes are also available widely against competitive prices. Be aware of fakes here as well. Purchase your scents in a mall like Nagoya Hill, BCS or one of the other shopping malls on the island to pick up your - or your girlfriends, mums - favorite perfume for prices that are lower than in Singapore, not to start speaking about prices in shops elsewhere in Indonesia. Luxury taxes are simply evaded, but you will pay slightly more than the import price.

Another group of products that has been slammed with extremely high import duties are alcoholic drinks. After first wine became too expensive, liqor soon followed and a short while ago, taxes on beer were also increased dramatically. But if you are on Batam you can still buy some of your favorite brands without these ridiculous levees.

Bringing these products to other parts of Indonesia is something that is not supposed to happen. But to be sure I asked the seller of my 0.75 liter bottle of Southern Comfort whether I would be able to bring this alcoholic drink with me through the luggage checks upon entering the boarding room, since any drinks should be checked in as luggage.

Of course I did not ask about the missing duty seals, it's so obvious that asking about it will almost certainly cause problems, because there should always be a duty seal on every bottle. It was no problem however to bring that one bottle with me in my hand luggage. That bottle set me back some 260.000 Rupiah, about 22 euro. It's more expensive than buying it duty free in Singapore, but I was no longer in Singapore, I was on Batam and I did not have to leave the country to make this purchase.

A small bottle of Southern Comfort, without duty seals, brought from Batam to Jakarta.
A small bottle of Southern Comfort, without duty seals, brought from Batam to Jakarta.

Liquor in general is something very hard to get your hands on when in Indonesia. The few duty free shops in Jakarta normally have a very unsatisfying choice - the four-liter casks of wine are more often sold out than they have stock, not to mention the other products - which makes a trip to Batam easily worth while when you are looking for adding some bottles to your collection.

Of course Batam is - like the surrounding area that is called Riau Islands province - a free trade zone. This zone has been installed somewhere in a faint history to stimulate the economy of the region closest to Singapore. Unfortunately it did not really work out, the trade that is done is mainly with entities outside the economic zone, but without the taxes that should be paid there.


Related blog entries (category 'Economy') Related blog entries (category 'Economy'):
25 May 2010 · Many hotels and restaurants on Bali don't pay taxes
19 May 2010 · Bali generates almost half of Indonesia foreign exchange
26 April 2010 · Bali to get some form of train system?
31 March 2010 · Bengawan Solo river to be dammed
10 March 2010 · 153 TKI deported from Malaysia
09 March 2010 · 1.1 billion euro against poverty in Indonesia

Related blog entries (category 'Economy') Tags: tax, discount, economic, zone, Batam, Indonesia, Singapore


Posted in Economy @ 17 June 2010 06:49 CET by Jeroen · 'Blog' RSS feed · permalink






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