Indonesian Government Regulation Poses Challenges for Shrimp Exporters and Processors

A recent Indonesian government regulation, effective from August 1st, is impacting shrimp exporters and processors. Under this regulation, exporters sending cargo worth USD 250 thousand or more must deposit 30% of their earnings for a minimum of three months in a government-controlled bank account. While aimed at ensuring financial stability and incentivizing compliance with tax incentives, this rule could potentially hinder exporters' purchasing power for shrimp. Opposition to the regulation is growing, especially among major industries in Indonesia. The government's objective is to align economic development with natural resource exports, including fisheries, which may pose a threat to the 2023 target of USD 7.6 billion in fishery and marine product exports. Further implementing regulations are expected to clarify the incentives offered under this rule.