Search for:
Category

Indonesia

Category

In February 2022, the Minister of Employment issued Regulation No. 2 of 2022 on the Procedure and Conditions for the Payment of Old Age Security Benefits. This regulation raised a number of questions, particularly from employees and unions, as it only allows employees who voluntarily resign to receive their Old Age Security (Jaminan Hari Tua or “JHT”) benefits payout when they reach the age of 56, regardless of their age when they resign. In response to these objections, the Minister revisited the February regulation. On 26 April 2022, in the week before the Idul Fitri holidays, the Minister issued Regulation No. 4 of 2022 on the Procedure and Conditions for the Payment of Old Age Security Benefits (“Regulation 4”), replacing Minister of Employment Regulation No. 2 of 2022.

The Indonesian Competition Commission (Indonesian acronym “KPPU”) has issued a regulation revoking the policy that extended the deadline for merger filings to 60 working days since closing, from 30 working days. The original deadline will be applicable effective 1 May 2022. Since November 2020, the authority has been implementing relaxation policies for competition matters due to the COVID-19 pandemic, including the extended deadline for merger filings.

The Carbon Tax was introduced in Law No. 7/2021 on Harmonization of Tax Regulation. The Carbon Tax will be imposed on carbon emissions that have a negative impact on the environment. The law stated that the Carbon Tax would be applied starting on 1 April 2022 for coal fired power plants. The law requires an implementing regulation in the form of a Minister of Finance regulation to stipulate the tariff and basis of the Carbon Tax, and a government regulation to stipulate the tax subject and tax object. There has to be consultation on the regulations with the Indonesian parliament.

A recent development concerning the replacement of a Ministry of Trade export restriction with a Ministry of Finance progressive export levy may be an indication of the Indonesian Government’s intention to implement wider restrictions for exports in the near future. It is fair to say that Indonesia is welcoming the era of export restrictions.

Just in time for COP26 in Glasgow, the President passed the long-awaited Presidential Regulation No. 98 of 2021 on the Implementation of Carbon Economic Value for the Achievement of Nationally Determined Contribution Target and Greenhouse Gas Emission Control in National Development. Reg. 98 revokes two prior regulations relating to GHG.

In 2021 the Indonesian Government issued Government Regulation No. 29 on Organization of the Trade Sector (“GR 29”). GR 29 is an implementing regulation of the Job Creation Law, which changes the rules for trade matters, including for distribution of goods, exports and imports. Following the issuance of GR 29, the Ministry of Trade (MOT) introduced a series of technical implementing regulations. MOT Reg. 20/2021 replaced the previous regulations, and has simplified the rules on import of various type of goods.

“In the spirit” of simplifying Indonesian regulatory frameworks, the Minister of Trade (MOT) recently issued MOT Regulation No. 18 of 2021 on Goods Prohibited from Being Imported and Exported to further implement Government Regulation No. 29 of 2021 on the Organization of the Trade Sector.

On 7 May 2021, Indonesia ratified a Comprehensive Economic Partnership Agreement (CEPA) with the European Free Trade Association (EFTA). The CEPA was introduced to accelerate the economic recovery from the effects of the pandemic and enhance comprehensive economic cooperation between Indonesia and the EFTA.

In response to an Indonesian Trade Security Committee report that shows that local manufacturers are threatened by the increased import of apparel and its accessories, the Ministry of Finance has imposed a safeguard duty on imports of those products. Minister of Finance Regulation Number 142 of 2021 on the Imposition of Safeguard Duty on the Import of Apparel and Its Accessories became effective on 12 November 2021.