Indonesia Plans To Tax Ships Crossing The Malacca Strait Following Iran’s Footsteps In Hormuz

Indonesia is planning to impose a levy on ships passing through the Malacca Strait, a critical maritime chokepoint.

The Government is looking to monetise one of the world’s busiest shipping routes, following Iran’s footsteps in the Strait of Hormuz.

Finance Minister Purbaya Yudhi Sadewa said that the move is in line with President Prabowo Subianto’s directive to make Indonesia a central player in the global maritime trade.

“Indonesia is not a marginal country. We sit along a key global trade and energy route, yet ships passing through the Malacca Strait are not charged,” Purbaya said.

The Malacca Strait is bordered by Indonesia, Malaysia, and Singapore.

It is a major trade route which connects the Indian and the Pacific Oceans and is considered to be a chokepoint like the Hormuz, the Suez Canal and the Panama Canal.

However, Purbaya has made it clear that neighbouring countries will also be a part of this major decision while emphasising that Indonesia controls the largest chunk of the passageway.

Singapore, on the other hand, does not agree with Indonesia.

Foreign Minister Vivian Balakrishnan said ship passage through the Malacca and Singapore straits must remain open and free to all.

“We will not participate in any attempts to close or interdict or to impose tolls in our neighbourhood”, he added.

Purbaya said that the proposal is at an early stage and will not be implemented anytime soon.

“With all the resources we have, we should not think defensively. We need to start thinking more offensively, but in a measured way,” Purbaya said.