Deregulation to be Sped Up to Increase Ease of Doing Business

TEMPO.CO, Jakarta - The government plans to decrease the number of unnecessary red-tapes - especially regional regulations that the central government sees as hurdles to development. Accordin to the Head of Ministry of Home Affair's Legal Bureau, Widodo Sigit Pudjianto, the government will putting a lot of scrutiny on Gubernatorial Decrees, as well as other decrees and regulations issued at the City and Regency level.

When asked about the mechanism of deregulation, Gubernatorial Decrees will be annulled by the the Home Ministry, while the decrees made by Mayors and Regents will be annulled by the Governor the City or Regency in question.

"If the Governor refuses to do so, the the Home Affairs Ministry will annul it himself," said Widodo on Monday, April 25, 2016 - before adding that the deregulation principles will be applied to rules and regulations relating to permit issuance, taxation, and regional retribution.

Widodo said that there are so many overlapping and unnecessary regulations about taxes and retribution, as it is see as the most reliable source of stable income for a region. As per this week, said Widodo, the Home Ministry have annulled at least 1,000 regulations - both at the Ministerial level as well as the regional level.

One of the examples that Widodo outlined is the Transfer of Title certification process - which in some regions, could take days, if not weeks to make. "We want this process to be able to be completed in mere days," said Widodo, who said that many City Administration has included prerequisites for the process, which the Home Affairs Ministry, considers as unnecessary.

In relation to the deregulation of taxation and regional retribution, several city and regional administration have protested because of its' potential to decrease the region's income. "That's not a reason - as of today, some of these regions can't make enough money to match the grants we channel from the central government to their regions," said Widodo.

As an example, the Home Affairs Ministry is socialising the reduction of the Property Sales and Purchase Tax - which is mandated by Eleventh Economic Deregulation Policy package. Widodo explained, although the tax is lowered, regions could still profit from the Taxable Value of Property (NJOP), which rises every year.

"We need to make investing in Indonesia easier, as this has been mandated by President Joko Widodo," said Widodo. "The real competition is no longer between provinces or regions, but between countries - especially now that the ASEAN Economic Community will soon be in full swing."

ADITYA BUDIMAN