JAKARTA (TheInsiderStories) – Indonesian government again issued the Economic Policy Package to solved the the current account deficit (CAD), addressed the global economic pressure, normalization of US monetary policy and the US-China trade war, said one senior minister on Friday (15/11).
The contents of the new Package are the expansion of tax holidays, relaxation of negative investment lists and relaxation related to Foreign Exchange Exports for Natural Resources.
For the expansion of the tax holiday, the government refined the provisions as well regulated in Minister of Finance Regulation Number 35/PMK.010/2018 concerning Provision of Corporate Income Tax Deduction Facilities.
In this case, the government prioritizes the expansion of tax holidays in the raw material-oriented pioneer sector. “This policy will be directly integrated with OSS (Online Single Submission),” he said.
The OSS system is a government effort to simplify business licensing and create an integrated licensing service model. Business licenses will be obtained by business operators in less than 1 hour.
As for the negative list relaxation policy, the government encouraged superior economic activity by inviting foreign direct investment participation for sectors that were previously quiet. The relaxation also extends partnerships for small and medium enterprises also cooperatives to collaborate so that their business continues to increase in terms of capacity and scale of business.
To strengthen the Rupiah, Nasution assessed the need of incentives for tax revenues for deposits and Indonesia certificates for businesses that carry export funds of natural resources, such as mining, plantations, forestry and fisheries in rupiah.
Previously, the Special Staff Coordinating Minister for the Economy Edy Putra Irawady said, the government plans to issue a 17th Economic Policy Package, which will specifically set rulings for imports and exports.
He gave as an example the elimination of the requirement for a recommendation from relevant ministries to approve the import of certain raw materials for industrial needs, which has traditionally been in force.
“For industrial activities we have to make it easy, so the system is post border supervision, but if there is a pre-edition for consumer goods,” he added.
One of the regulation changes in the upcoming package will be to eliminate the requirement for companies to obtain recommendation or sponsor letters from ministries to import raw materials, he said.
The economic policy package is expected to help local producers meet their raw material demands on time, without having to deal with bureaucratic red tape at the ministerial level.
Through this policy package plan the needs of industrial raw materials can be met in a timely manner. In the end, the industry sector can grow better and its product exports increase.
“The raw materials should not be disturbed, so it will be faster, especially for export destinations such as Ease of Import Export Destination,” he said.
According to Indonesia Statistics, Indonesia’s total exports last year totaled US$168.7 billion, up 16 percent from 2016, while imports also increased 16 percent to US$156.9 billion.
While, Finance Minister Sri Mulyani Indrawati said the government would ease imports by cutting more than half the number of items currently on the prohibited or severely restricted list to accelerate handling processes at ports across the country.
The last Policy Package was issued by the government in late August of 2017, aiming at creating an integrated licensing system. The policy package also deals with strict supervision for the transition from the manual licensing system to an online system, called single submission.
Through a Presidential Regulation on the Acceleration of the Implementation of Business the central government aims to improve the standard of efficient, easy and integrated business licensing services without neglecting good governance.
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