This paper specifically examines the Smuggling that occurred between Indonesia and the ACFTA member countries can be seen from the import-export trade gap. Smuggling occurs because the attempt to avoid tariffs, resulting in the manipulation of incoming documents, both in terms of quantity and price of imported goods. The policy change tariff rates on ACFTA cooperation and increase financial penalties affecting allegedly smuggling. This study uses a fixed effect panel data regression to analyze the policy change. The results obtained are: 1. The reduction of smuggling after the application of policy to reduce tariff rates on ACFTA cooperation, and 2. A decrease in smuggling after the implementation of the policy of increasing the maximum financial penalties.
- Financial Pinalties
- Tariff Rates