Black Market Mobile Phones Costs Indonesia Trillions Annually



Laila Afifa

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  • TEMPO.CO, Jakarta - The potential tax losses from the overflowing distribution of illegal mobile phones in Indonesia drove the government to impose a regulation that validates IMEI. This regulation is planned to be introduced and enter the operational phase on February 17, 2020.

    The Indonesia Teknologi Forum (ITF) recorded that the circulation of illegal phones in the country’s black market consists of 30 percent of the entire 50 million new mobile phones that entered the country in 2019.

    Moreover, the data from the Indonesia Mobile Phone Association (APSI) revealed that 150 million people in Indonesia are smartphone users, add that to another 45 million new smartphones, where 20 to 30 percent of them are obtained illegally.

    A rough calculation of a cell phone’s resale value (averaging in Rp2.2 million) added to the large population equals to Rp22.5 trillion. With the circulation of illegal phones, the country potentially losses Rp2.8 trillion annually, from 10% VAT (PPN) and 2.5% income tax (PPh).

    Indonesia’s late decision to introduce an IMEI regulation follows other countries that have introduced the IMEI validation before. The countries that have adopted this regulation are Turkey, Pakistan, India, and Russia.