JAKARTA (TheInsiderStories) – Bank Indonesia (BI) requires all importers to report the use of foreign exchange (forex) for overseas purchase starting Jan. 1, 2020, said the central bank yesterday (12/04). The new policy has been regulate through BI Regulation Number 21/14/PBI/2019 regarding Foreign Exchange Earning and Foreign Exchange Payment.
The Bank expect with the new regulation will improve the efficiency of forex earnings reporting mechanism by the exporter and the bank. In detail, the submitting of non – natural resources forex earnings and payment spending through the integrated system will be implemented on Jan. 1, 2020.
Then, the submitting of information and reporting related to natural resources forex revenues through the system will be implemented on Jan. 1, 2021. At the same dated, BI said, the implementation of sanctions to the importer will be implemented.
BI also regulates the mechanism of forex earning by changed the reporting of the reveneus from bank to the central bank through the Financial Transactions Messaging Systems. There is no sanction to non – natural resources exports.
The central bank also lessen the reporting to the bank and give the exemption of the sanction in the form of export suspension. Earlier, the government impose sanctions on people who violate a new regulation intended to force exporters to keep their forex revenues from natural resources in Southeast Asia’ largest economy financial system.
The rule, which took effect July 1, 2019, is one of the government’ efforts to ensure that forex returns to Indonesia so that it can improve . Repatriated earnings could help the country’ economy refill its declining foreign exchange reserves, which the central bank has been using to keep the Rupiah from falling too sharply amid a heavy selloff in emerging market currencies.
Finance ministerial regulation number 98/PMK.04/2019 on tariffs and administrative punishment imposes fines for exporters who violate the export proceed of natural resources and outlines the procedures for imposing levies.
Under the regulation, an exporter of natural resources who don’t deposit export earnings in a special bank account within a certain period of time is required to pay 0.5 percent of the total forex earned as a fine.
The regulation derived from Government Regulation Number 1 of 2019 on requirements for exports to put their earnings from natural resources into Indonesia’s financial system. The commodities include those from mines, plantation, forests and the fisheries.
The government regulates the use of export revenues for a number of type of payments, including import tax, debt, dividend, and others, as stipulated in the investment law. Violators of the regulation are required to pay 0.25 percent of their total export earnings.
For the revenues, an exporter is required to have escrow accounts in an Indonesian bank. If the exporter has an escrow account in another country, it must be transferred to a bank in Indonesia. In addition, if the exporter does not abide by the regulation, the government will issue further punishment in the form of delaying customs services.
“Regarding sanctions, customs and excise will do, whether the export delays or payment of fines, as required regarding the proceeds from natural resource exports,” said finance minister Sri Mulyani Indrawati recently.
She adds, that the customs and excise directorate had cooperated through an information system with BI. With the new way, the flow of export goods can be tracked by customs and excise, while the flow of money can be traced through the banking system, the minister stated.
The government also could identify the name of the company, the number of goods, and the amount of foreign exchange they get from the export activity. Indrawati stressed that the regulation is one of the government’ efforts to ensure that forex returns to Indonesia so that it can improve the current account balance.
In November, the country’ forex reserves stood at US$117.3 billion, slightly up compared to October at $115.2 billion, Bank Indonesia data showed.
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