The government wants the discussions in the legislature over the drafts of the first two omnibus bills to start by mid-January so they can be passed into law by April.
Coordinating Economic Minister Airlangga Hartarto said the omnibus bills on job creation and taxation would need to be put on the National Legislation Program (Prolegnas) list before being deliberated at the House of Representatives.
“Since the legislature is in recess now, they will resume work in mid-January and the process [to discuss and pass the bills] should take about three months,” he told the press on Wednesday on the sidelines of a discussion held by the Indonesian Chamber of Commerce and Industry (Kadin).
On Monday, President Joko “Jokowi” Widodo addressed House speaker Puan Maharani during the 2020-2024 National Development Planning Conference (Musrenbangnas), requesting she ensure deliberations over the bills would “take no longer than three months”.
The omnibus bill on job creation would amend or annul 1,194 articles in 82 existing laws and would touch on 11 clusters of issues, including simpler licensing procedures and labor and land procurement. Meanwhile, the omnibus bill on taxation seeks to cut corporate income tax rates and adjust interest penalties, among other measures.
The government is also preparing an omnibus bill on small and medium enterprises (SMEs).
“Small and medium enterprises will not need a business permit in the future. They only need to register with their Citizen Identity Card [KTP],” Airlangga said.
He said the single registration system through the KTP would also ease distribution permits and halal certification registration.
Meanwhile, Rosan P. Roeslani, the chairman of Kadin and the head of the omnibus bill task force, said Kadin’s internal discussions undertaken to formulate input for the bills would be concluded by Dec. 26 and the results would be delivered to the House by the first week of January.
The omnibus bill task force was assigned to consult the public, do problem inventory and suggest input on the job creation and taxation bills.
“I am sure that with the omnibus law, our ease-of-doing-business rank will improve,” he told the press, adding that administrative tasks, such as applying for a permit, were among the most inhibiting activities for investors.
The country’s ranking in the World Bank’s 2020 Ease of Doing Business (EODB) index has remained stagnant at 73rd out of 190 countries. Indonesia is lagging behind other ASEAN countries such as Singapore (in second place), Malaysia (15th) and Thailand (27th).
According to 190 cases recorded by the Office of the Coordinating Economic Minister’s working group, the top three examples of investment red tape are license procurement (32.6 percent), land procurement (17.3 percent) and regulations and policies (15.2 percent).
“With this bill, investors will get more certainty. They don’t need to apply for each permit separately. The government would already prepare the land, so investors only need to put in the money,” Rosan said.
He said the increase in EODB would attract more investments, especially if the House could conclude the deliberations by April.
By: Eisya A. Eloksari