8 July, 2016
Government Issues Revised Negative Investment List
The Government recently revised its Negative Investment List to permit foreign direct investment ("FDI") for the first time in several sectors whilst increasing the FDI limits in others. The 2016 Negative Investment List is set out in Presidential Regulation No. 44 of 2016 and came into force on 18 May 2016.
The main impetus behind the revision of the Negative Investment List is to enhance Indonesia’s economic competitiveness in the ASEAN Economic Community ("AEC") by attracting greater FDI inflows into sectors that were either completely or partially closed to foreign investment.
Ministry of Transportation Moves to Regulate App-based Transportation Service Providers
As a response to large-scale protests by taxi drivers in March, the Ministry of Transportation has issued Regulation No. PM 32 of 2016 on Unscheduled Public Transportation Services ("Regulation"). The new Regulation, which was issued on 1 April 2016 and comes into force on 1 October 2016, addresses, among other things, the different types of unscheduled public transportation service (penyelenggaraan angkutan orang dengan kendaraan bermotor umum tidak dalam trayek), the rights and obligations of public transportation companies and, very specifically, the role of app-based transportation service providers ("ATSPs") in providing transportation services.
New Rules on OTT Services in the Offing
On 29 April 2016, the Minister of Communications and Informatics launched a public consultation on a draft regulation on the provision of content and /or application services over the Internet (the "Draft Regulation"). The Draft Regulation is a follow-up to Minister of Communications and Informatics Circular No. 3 of 2016 on the Provision of Content and /or Application Services over the Internet (Over the Top or "OTT"), which was issued on 31 March 2016.
Initially, the public consultation period for the Draft Regulation was due to end on 9 May 2016. However, according to a press release published on the official website of the Ministry of Communications and Informatics, it was extended to 26 May 2016. Assegaf Hamzah & Partners has submitted its views to the ministry as part of the consultation process.
Credit Card Issuers Now Required to Divulge Customer Data to Revenue Authorities
As part of the Government's efforts to raise the tax ratio and boost tax revenues, the Minister of Finance issued Regulation No. 39/PMK.03/2016 (on Tax Data and Information, and Procedures for Furnishing Tax Data and Information / "New Regulation"), which came into force on 23 March 2016.
The New Regulation requires a total of 23 Indonesia-based credit-card issuers to report a wide range of information on customer transactions to the Directorate General of Taxes (as the Indonesian Revenue Service is known), including information on such things as transaction details, dates, values and locations. This marks the first time that credit-card issuers in Indonesia have been required to provide such information to the Directorate General of Taxes.
More Manufacturers to Get Tax Breaks
Government Regulation No. 18 of 2015 (on Income-Tax Concessions for Investments in Particular Sectors and/or Regions) has been amended by Government Regulation No. 9 of 2016. The new regulation, which entered into force on 30 April 2016, accords tax breaks to five additional business fields: (1) garment manufacturing using textiles as raw material; (2) garment manufacturing using leather as raw material; (3) manufacturing of casual footwear; (4) manufacturing of sports footwear; and (5) manufacturing of industrial-safety footwear.
New Legislation Provides Improved Framework for Managing Financial Shocks
Law No. 9 of 2016 on the Prevention and Control of Financial-System Crises, which came into force on 15 April 2016, establishes an enhanced legal framework through which the financial-sector authorities can take the necessary measures to prevent or respond to a financial crisis. The legislation mandates the setting up of a Financial System Stability Committee ("KSSK"), and sets out detailed rules governing the prevention and control measures that may be taken in times of financial vulnerability. In addition, the Financial Services Authority ("OJK"), in conjunction with Bank Indonesia, is required to prepare a list of systemically-important banks.
The legislation is designed to avoid a repeat of the long-running controversy that resulted from the bailing out and nationalization of Bank Century during the 2008 financial crisis.
Environment Ministry Issues Regulation on Forest Fires
The Environment and Forestry Ministry has issued Regulation No. P.32/MENLHK/SETJEN/KUM.1/3/2016 on the Control of Forest and Land Fires. The Regulation, which comes into force on 18 April 2016, updates the guidelines for the control of forest fires, covering: (i) the organisations that must be established at a governmental and management level in order to monitor and ensure the implementation of various measures relating to forest fires; (ii) quantity and quality standards related to human resources and facilities / infrastructure for the control of forest-fires; and (3) activities that must be undertaken to control the threat of forest fires, including planning, prevention, countermeasures, post-fire activities, work coordination, and determination of alert status).
Ministry of Trade Acts to Speed up Licensing
In line with the Government's efforts to reduce bureaucratic delays, Minister of Trade Regulation No. 14/M-DAG/PER/3/2016, which amends Regulation No. 77/M-DAG/PER/12/2013 (on the Simultaneous Issuance of Trading Licenses / "SIUP" and Company Registration Certificates / "TDP" for Trading Companies), sets faster processing times for the issuance of SIUP and TDP. The two documents must now be issued within two business days of a completed application being received. If an application is deemed incomplete, then a rejection letter must be issued within one business day of the original application being received. The regulation came into force on 2 March 2016.
Government Issues New Rules on Labour Unions in Special Economic Zones
In response to the continuing threat of labour unrest in the country's special economic development zones, Minister of Employment Regulation No. 8 of 2016 (on the Establishment of Labour Unions and Labour-Union Forums in Undertakings Located in Special Economic Zones) sets out rules governing the recognition of labour unions in special economic zones and mandates the establishment of labour union forums where more than one labour union is organised in a particular undertaking. In order for a labour union to be recognised, it must be registered with the Local Government Manpower Agency. The regulation came into force on 8 March 2016.
For further information, please contact:
Eng Beng SC, Partner, Rajah & Tann
eng.beng.lee@rajahtann.com
