Retail in Asia

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Indonesia’s plan to drop luxury sales tax could see prices drop for consumers

Retailers are seeing room to slash prices following a government plan to cut Indonesia’s luxury sales tax on furniture, home appliances and electronic products, amid slowing demand and mounting pressure from a weakening rupiah.

Indonesia, where household consumption accounts for more than 50 percent of the economy, saw its weakest growth in five years between January and March this year, with the economy growing by 4.7 percent.

The government plans to drop the country’s luxury sales tax – a levy put in place to narrow income inequality – by the end of June, in order to stimulate household spending in the Southeast Asia’s largest economy, Finance Minister Bambang Brodjonegoro said a week ago.

(Source: Jakarta Globe )