Indonesia To Launch New Version of One Roof Investment Service

JAKARTA (TheInsiderStories) – President Republic of Indonesia Joko Widodo will launch a new version of investment services “Online Single Submission” (OSS) this week, a delay from the initial schedule of April 2018, said one senior official on Friday (29/06). OSS is basically an upgrade of one roof investment service run back in 2015 by the investment coordinating board.

One of the key output of the regulation is to raise Indonesia’s ease of doing business (EODB) ranking to 40 in 2019 from the current ranking of 72 out of 190 countries. Indonesia’s ranking is still below Singapore which ranks 2nd, Malaysia at 24th, Thailand at 26th, Brunei Darussalam at 56th, and Vietnam at 68th.

According to Coordinating Minister for Economic Affairs (CMEA), Darmin Nasution OSS will process early part of a given investment, such as approval, tax ID, company name and export & import ID.

He said, Widodo has signed the Government Regulation Number 24/2018 in June, which regulate the transfers process of all permits and licenses process from the investment coordinating board to the CMEA to be processed under the OSS System. All the investment permit that proposed before and after this regulation will be done by OSS, he added.

President Widodo on May 16 has ordered the ministries and regional to prepare the system, human resource, and bureaucratic system to run the new platform. “Once OSS is launched, sector-based ego must be completely disappeared, reduce the complicated and long-time procedures,” he said.

Furthermore, he stated, the policy will be followed by the establishment of OSS desks at all government levels, from ministries down to municipalities to help smooth coordination related to the business licensing process and to monitor the process at each bureaucratic level.

So far, Nasution explained, 17 provinces has completed the task forces desks in the provincial and regency or municipal levels including DKI Jakarta, Central Java, Yogyakarta, Riau, North Sumatra, and South Sulawesi.

Widodo reminded OSS system is not enough to attract investment, therefore, the ministries and regional heads should push the regulation simplification to attract investment. The government already revoked conflicting regulations, 186 in the energy sector alone, but apparently, it is not enough to improve the investment climate.

Furthermore, the government should offer the tax incentives to attract more investors. The government already provides a tax incentive to attract investment. This incentive allows companies which invest Rp500 billion to more than Rp30 trillion to scrap their obligation to pay corporate income tax for 5-20 years.

In addition, the government offered tax deduction up to 100 per cent. Furthermore, the government cut down the tax holiday approval process to 15 days, from the previous 45-day process.

However, this tax holiday is not enough as it is only offered to the 17 sectors including chemical industry and pharmaceutical industry. However, some other priority industries such as upstream oil and gas have not received a tax holiday.

Temporary Halt Investment Permit

In conjunction with the transition of nation-wide permits and licenses to the OSS System, investment coordinating board starting June 29, suspended all processing and issuance of permits and licenses for the time being. Processing and issuance of permits and licenses will resume soon at the CMEA after the OSS System has been officially launched.

In accordance with guidance provided by the CMEA meeting on June 28, the board will “warehouse” on a temporary basis, all incoming applications for permits and licenses, to be channeled to the OSS System. But for several permits and licenses will continue to be processed by the agencey after the new government regulation has come into effect.

While one roof services will continue to open during working days as normal, in order to answer any queries from permit applicants and investors, and to “warehouse” any incoming permit and license applications. The board will also be preparing itself to take over the OSS System’s operations approximately five months from now.