TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

One law to rule them all: Government to amend thousands of articles through omnibus bills

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Fri, December 13, 2019   /   09:30 am
One law to rule them all: Government to amend thousands of articles through omnibus bills Coordinating Economic Minister Airlangga Hartarto (second left) accompanied by Deputy Finance Minister Suahasil Nazara (left), Agrarian and Spatial Planning Minister Sofyan Djalil (second right) and Indonesian Chamber of Commerce and Industry (Kadin) chairman Rosan P. Roeslani talks to the press at the Office of the Coordinating Economic Ministry in Jakarta on Thursday, Dec. 12, 2019. Airlangga said the government would soon submit two omnibus bills to lawmakers so that the two parties could begin deliberations over them. (JP/Marchio Irfan Gorbiano)

The government has said that it will soon submit two omnibus bills to lawmakers so that the two parties can begin deliberations over them.

If passed, the bills on job creation and on taxation will amend more than a thousand articles in prevailing laws that some say have deterred investment into the country.

“We will submit the draft of the omnibus law on taxation to the parliament this December, while the omnibus law on job creation [will be submitted in] early January,” Coordinating Economic Minister Airlangga Hartarto said in Jakarta on Thursday.

The government would also simultaneously draft the laws’ derivative regulations during their upcoming deliberations at the House, Airlangga added.

For the planned omnibus law on job creation, the government had identified 1,194 articles in 82 laws that would be amended to accommodate one of President Joko “Jokowi” Widodo’s top priorities: attracting investment in order to create more jobs.

The job creation bill would touch on 11 clusters of issues, including simpler licensing procedures and labor and land procurement.

Read also: Indonesia plans sweeping tax reforms for 'expatriate' income, dividends, penalties

Agrarian and Spatial Planning Minister Sofyan Djalil said the bill would authorize the establishment of a new body to act as land manager under the authority of the ministry to ensure a smooth land acquisition process for investors.

“We will set up a state-owned land bank under the authority of the Agrarian and Spatial Planning Ministry so that it will be possible for the land to facilitate job creation and investment,” Sofyan said, adding that, under the current mechanism, the government could not immediately secure land needed by investors to realize their investments.

Meanwhile, the omnibus law on taxation would effectively lower the corporate income tax from the current 25 percent to 20 percent by 2023. It would also lower tax penalties, ease income tax regulations for expatriates and work toward taxing multinational digital firms that have no physical presence in Indonesia yet benefit from activities in the Indonesian market.

The omnibus law on taxation would amend articles in the Value Added Tax Law, Income Tax Law, General Taxation Law and law on regional taxation and retribution.

Indonesian Chamber of Commerce and Industry (Kadin) chairman Rosan P. Roeslani said that Kadin would actively disseminate the content of the draft bills.

“We will disseminate [information] to the public and hold consultations in the coming months because we want to make sure that […] all stakeholders, such as industry players, the general public and other stakeholders, are on the same page,” Rosan said.