ndonesian central bank overhauled the provisions on export proceeds and foreign exchange for imports as stipulated in Bank Indonesia Regulation (PBI) Number 22 of 2020 - Photo: Privacy

JAKARTA (TheInsiderStories) – The government chopped export procedure for natural resources to boost foreign exchange (forex) revenues and to anticipate capital outflow from the country, said senior minister last week. The policy also aimed to maintain the stability of the Rupiah against the turmoil of global economic condition.

According to the Coordinating Minister for the Economy Darmin Nasution, the regulation is stated in Government Regulation Number 1 Year 2019 concerning Foreign Exchange Exports from Natural Resources Management, Management and/or Processing Activities.

Government also regulated the forex revenues to be placed in a special account in local bank. The forex proceed, he said, originating from the natural resources sector, especially mining, plantation, forestry and fisheries.

Its expected, the proceeds to be able enter the Indonesian financial system also to strengthen the current account deficit (CAD), which has been experiencing a sharp deficit last year. As a result, the Rupiah is increasingly eroded compared to US Dollar.

The government also imposes administrative sanctions for exporters who do not want to place the forex proceeds in a special bank account within the country by the end of the third month after the registration of export customs notification.

Nasution revealed, that the government was also trying to increase the export volume of various commodities by reducing the obligation of surveyor report participation and a limited ban on a number of products would also be re-evaluated.

As an example, to improve the efficiency of the logistics sector, the government also plans to optimize the enforcement of an order delivery system online for the automotive sector.

“We need a policy instrument to maintain the stability of the trade balance performance, especially for the first quarter of this year. The instruments that we need are for a very immediate, short-term and medium-term period,” he said.

While, Bank Indonesia (BI) Governor Perry Warjiyo ensured that the central bank had prepared regulations and special savings account techniques to support the government policies. Especially, he said, regarding the provision of tax incentives that are more taken abroad and converted to Rupiah, such as taxes and deposit rate.

Furthermore, Minister of Trade Enggartiasto Lukita admitted has plan to simplify the procedures export at his ministry. Then, the Ministry of Finance’ directorate general of customs and excises Heru Pambudi supported the plans by ease the procedural of customs services and improvement of business processes to encourage exports.

He said, in the next one or two weeks it would reduce the queue of goods and suppress service congestion in the port, so that reputable companies did not hesitate that the new rules would be misused.

Through these services, Pambudi stated, the exporters no longer need to submit notification documents before entering the port because the documents can be fulfilled when the goods are on board.

In addition, ready-made manufactured goods can be immediately sent to the port without having to wait for the entire production period to finish. The process of returning defective motor vehicles can also be carried out quickly without being recorded in export documents.

Written by Daniel Deha, Email: theinsiderstories@gmail.com