TEMPO.CO, Jakarta - In a bid to boost investment, the government has made reforms in policy area and licensing services, according to the Chairman of the Investment Coordinating Board (BKPM) Franky Sibarani.
“The two [areas of] reforms are aimed at enhancing Indonesia’s competitiveness as an investment destination country,” Franky told 600 investors yesterday at the HSBC Economic Outlook 2016 in Jakarta. The seminar was titled “ASEAN Economic Community: Indonesia to Punch above Its Weight”.
Franky elaborated that policy reforms are the first step taken by the government. The BKPM together with ministries and other agencies have streamlined licensing processes in various sectors, he said. For example in electricity, industry, plantation and tourism sectors. In electricity sector, the government has trimmed down the number of permits from 49 to 25. The government has also streamlined permit application processes from 932 days to 256 days.
The government has also issued 12 policy packages, some of which are aimed at enhancing investment competitiveness. The policy packages stipulate, among others, minimum wage calculation. In addition, the reduction of production cost through lower fuel prices, gas prices and electricity tariffs for industry, as well as income tax reduction for textile and footwear industries.
Franky added that the government has revised the negative investment list. The policy is not only aimed at opening various fields of business for foreign investment, but also protecting micro, small and medium-sized enterprises. Also for distributors associated with production process, such as e-commerce and pharmaceutical sectors, particularly pharmaceutical raw materials.
The government has also revised a number of fiscal policies to be more business-friendly, among others, by expanding the scope of industry that can enjoy tax holidays and tax allowances as well as certainty in the application for the facilities. The government has also extended the length of the tax holidays from 10 years to 25 years maximum.
Recently, the government has improved doing business indicators to provide more certainty. “To make it easier, quicker, more simple and more transparent,” Franky explained.
The government has reformed the licensing services by transforming services to investors from permit-oriented to service-oriented. “It’s like one-stop shop for investment.”
Franky added that other form of reform in licensing services is acclerated customs clearance of the green in ports. The BKPM has joined hands with Director General for Excise of Finance Ministry to provide accelerated service of the green line for import of capital goods whereby no screening will be performed on imported capital goods thus accelerating customs clearance from five days to 30 minutes.
The BKPM even provides assistance services for major investors such as China. It is aimed at expediting capital investment realizations. The BKPM has asked for help from Chinese Embassy in Jakarta to establish a designated desk at the BKPM office.
“We feel that we have to give more support due to several issues, such as language problem,” Franky said. Recently, the BPKM has provided assistance to prospective investors from Belgium who visited Jakarta in March.
BAGUS PRASETYO
