Health is a basic need of human life. To achieve a healthy life, various forms of a good lifestyle, such as exercise and the consumption of nutritious food, are carried out. However, there are times when the human body is not in a fit and healthy condition. Drugs are an alternative that is widely chosen to sanify human body conditions.
There are many types of drugs circulating in Indonesia. Some are produced in Indonesia, while others are obtained through imports from other countries. In order to ensure fulfillment of standards compliance and safety requirements, efficacy/benefit, as well as the quality of drugs circulating in Indonesia, Indonesian Food and Drug Authority/Badan Pengawas Obat dan Makanan (BPOM) is responsible for implementing national drug control policies.
What about the taxation aspect of drug purchasing and selling transactions, particularly related to drugs obtained from abroad through import schemes?
Drug import transactions are typically subject to fiscal levies in the form of import duties and import taxes. However, the government can provide fiscal incentives in the form of import duty and tax exemption in accordance with import allocation. The exemption of import duty on drugs may differ from one party to another. The distinction is between the Subject (recipient of goods), the Object (type of goods), and the designation of the goods in question.
Import duty
According to Article 25 paragraph (1) letter n of the Customs Law, import duty exemption is granted on drugs imported using the government budget and is intended for the public interest. Furthermore, in accordance with Article 3 of Ministry of Financial Regulation Number 70/PMK.04/2012, goods sent in the form of drugs to be given to people in need in the form of public worship, charity, social, or cultural purposes are exempt from import duties and/or excise.
Import duty and/or excise exemption is only granted if it is submitted by an Agency or Institution engaged in public worship, charity, social, or culture. Furthermore, in accordance with Article 4 Ministry of Financial Regulation Number 70/PMK.04/2012, Agency or Institution must be a legal entity domiciled within the Republic of Indonesia territory, have a notarial deed that stated the establishment of a legal entity and is non-profit.
Import Tax
Article 22 of the Income Tax Law governs income tax provisions on imports. According to Article 22 paragraph (1) letter b, Minister of Finance may designate specific agencies to collect taxes from taxpayers who engage in import-related or other business activities. Furthermore, Ministry of Finance Regulation Number 34/PMK.010/22 as the latest modified with Ministry of Finance Regulation Number 41/PMK.010/222 governs the amount of Income Tax Article 22 levy on imports.
According to Article 3 paragraph (1) Ministry of Finance Regulation Number 34/PMK.010/2017 as the latest modified with Ministry of Finance Regulation Number 41/PMK.010/2022 stated that the collection of Income Tax Article 22 is exempted for:
| 1 | Import of goods and/or delivery of goods based on the provisions of laws and regulations is not payable Income Tax |
| 2 | Imports of goods that are exempted from levies of Import Duty and/or Value Added Tax (VAT) include:
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Therefore, because the goods delivered by grants/grants in the form of drugs for the people in need for public worship, charity, social or cultural purposes are exempted from import duties and/or excise, in accordance with Article 3 Ministry of Finance Regulation Number 70/PMK.04/2012, the importation of these drugs are also exempted from Income Tax Article 22.
However, it should be noted that when the import of drugs does not meet the provisions of Article 3 and Article 4 Ministry of Regulation Number 70/PMK.04/2012, there is a possibility that the import is subject to Import Duty and Income Tax Article 22 on Import.
Provisions Regarding Covid-19 Handling
Regarding Covid-19, government stipulates Ministry of Finance Regulation Number 188/PMK.04/2020, which states that the import of vaccines for the prevention of the Covid-19 pandemic obtains customs, excise and/or taxation facilities in the form of:
- Exemption from import duty (including anti-dumping import duty, remuneration import duty, security measure import duty, and/or retaliatory import duty) and/or excise;
- VAT or VAT and Sales Tax on Luxury Goods are not collected; and
- Exemption from Income Tax Article 22 on Imports.
Furthermore, the facility is also provided for the release of Vaccine from imports and/or other locations within the customs area from:
- Bonded area or bonded warehouse;
- Free Trade Zone or special economic zone; and/or
- Company Recipient of Import Facility for Export Destination.
