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Jakarta Post

Indonesia to relax restrictions to speed up imports, exports amid virus threat

  • Made Anthony Iswara and Adrian Wail Akhlas

    The Jakarta Post

Jakarta   /   Fri, March 13, 2020   /   06:53 pm
Indonesia to relax restrictions to speed up imports, exports amid virus threat Keep it steady: A crane lifts lumber for export onto a cargo vessel at a port in Lianyungang, Jiangsu province, China. (Reuters/Stringer)

The government has prepared a non-fiscal stimulus package that aims to ease current restrictions and accelerate export-import activities, targeting business sectors battered by the novel coronavirus disease (COVID-19).

Coordinating Economic Minister Airlangga Hartarto said both fiscal and non-fiscal stimuli were rolled out by the government to keep the real sector moving amid the novel coronavirus spread that disrupted business activity and global supply chains.

“These stimuli took aim at fueling the real sector to work and maintaining people's purchasing power," Airlangga told a news conference in Jakarta on Friday.

Indonesia announced on Friday it was allocating Rp 120 trillion (US$8.1 billion) from the state budget to stimulate the economy through tax incentives and subsidies for workers, businesses and families affected by the COVID-19 pandemic.

The non-fiscal incentive is part of a second stimulus package worth Rp 22.9 trillion announced on the same day that includes individual and corporate tax breaks as well as relaxation in loan disbursement and restructuring.

Such non-fiscal policies include reducing the number of export restrictions, omitting the requirement to provide a health certificate and V-Legal documents unless required by importing countries. 

Similarly, it will scrap 749 harmonized system (HS) codes, consisting of 443 HS codes for fish and fish products and 306 HS codes for forestry products.

The stimulus will also reduce and simplify restrictions for producers who import steel, alloy steel and its derivatives as well as several food commodities to ensure the availability of raw materials. The government will simplify regulations of animals, medicine and food imports as well.

Moreover, authorities will incentivize “reputable traders” that have a “high level of compliance” by automatically responding to and approving applications for restricted exports and imports as well as removing surveyor report requirements for mandatory commodities. So far, the government has classified 735 companies as "reputable traders".

The government will also beef up its supervision through the National Logistics Ecosystem (NLE), a platform that integrates information systems between the government and the private sector. Such a move will help synchronize the flow of information and export-import documents at ports and other domestic goods trading.

Particularly, the NLE plans to integrate information from the government’s export-import licensing website Indonesia National Single Window (INSW) with Indonesia’s port system (Inaport), the Trade Ministry’s online trade system (Inatrade), Customs-Excise Information System and Automation (CEISA), trucking systems, warehouse systems, transportation systems and terminal operator systems, among other systems.

“This will be finished in the next three months so that importers and exporters no longer need to go back and forth to input [information] with the integrated system,” Airlangga added.

The new stimulus adds to a Rp 10.3 trillion first stimulus package announcement on Feb. 25 that boosts staple need and mortgage subsidies for low-income families and fiscal incentives for travel-related industries. The government will also speed up disbursement of social spending in the first quarter as well as the new training subsidies called the pre-employment card this month.