Indonesian Jewelry Association Urges Government to Tax Only Manufacturers

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October 24, 2025 | 12:18 pm

TEMPO.CO, Jakarta - The Indonesian Jewelry Manufacturers Association (APPI) has proposed to the Minister of Finance, Purbaya Yudhi Sadewa, that the jewelry tax collection scheme should only be imposed on producers. The association argues that the current scheme makes monitoring difficult because most illegal producers do not collect and remit value-added tax (VAT) when selling their products to gold shops.

Purbaya explained that jewelry business owners have voiced compliance challenges among producers, including the proliferation of jewelry producers operating without complete tax administration. "They ask us to adjust policies related to jewelry producers deemed illegal," said the Minister of Finance, as quoted by Antara, Friday, October 24, 2025.

The practices mentioned by the association include producers who do not provide purchase documents or purchase certificates, resulting in unmonitored and unaccompanied sale activities to gold shops, which are not accompanied by tax remittance.

In accordance with Minister of Finance Regulation (PMK) No. 48 of 2023, the total tax burden on gold jewelry reaches approximately 3 percent. The amount consists of 1.1 percent at the producer level and 1.6 percent VAT at the final consumer level.

To close the leakage gap and expedite tax officer monitoring, the association proposes that the entire 3 percent tax burden be directly imposed on producers. "So they propose to deploy everything at 3 percent (to the producers). So consumers no longer pay, only at the factories. So we can control it more quickly," said Purbaya.

He added that the association also estimates that around 90 percent of current producers are operating outside the compliant tax mechanism, resulting in suboptimal state revenue potential from the jewelry sector.

Purbaya said he would review the proposal, focusing on the potential increase in state revenue and the effectiveness of monitoring. "So, asking for treatment on how to pay the VAT not only by consumers, but directly by those companies," he said.

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