Foreign ownership can be 100% in 54 business sectors


Jakarta – The government is now open to allow foreign customers to hold 100% of shares in 54 business sectors after exclusion from the list of negative investments (DNI). The new policy is part of Volume 16 of the Economic Policy Package. However, according to economist Indef Bhima Yudhistira relieving the DNI that foreigners can enter 100% in certain sectors, investors do not want to directly enter Indonesia.


Based on data from the Ministry of Economic Co-ordination, 54 business areas include: textile printing industry, retail trade via postal and internet reservations, internet cafes (warnet), oil and gas drilling services in the sea, fretboard and white cigarette industry, to artistic buildings.

In addition, the business sector is also opening up the sector; internet trade, plywood industry, natural tourism industry, geothermal research, oil and gas drilling services in the sea, wood pulp industry and data communication systems.

According to the special staff of the Coordinating Minister for the Economy, Edy Putra Irawady, 54 DNI sectors are excluded because they feel that they have good investment potential if the share of foreign capital was 100%. Freedom is taken as a step towards increasing the flow of foreign capital or investment into the country.

Eddy said that the investment is one of the drivers of economic growth. In addition, this policy is expected to increase the strength of the national industry to produce several different products, thereby contributing to an increase in exports and a reduction in imports.

This policy was adopted at the current import pressure. "Changes in the DNI for optimization, so we are designing more efficient, expansive and attractive to encourage export, logistics, import substitution and increase investment," he said, as said on Friday (11/16).

According to Edi, the changes in the DNI were also based on the spirit of the evaluation of the liberalization of policies that the government has already adopted. The results of government assessments show that many policies adopted to increase investment have not provided satisfactory results. Although the government previously issued a number of business sectors from the DNI, the interests of investors to channel capital into the sector were not in line with expectations.

On the basis of the records of the Coordination Ministry of Economy, in the DNI is in accordance with the Presidential Decree (Perpres) no. 44 of 2016 on the list of closed and open business areas with needs in the investment sector involved at least 515 areas.

From these rules, at least the government issued 41 business areas from the DNI. Unfortunately, two years ago the interest in investing in 41 business sectors was still minimal. Although the government has received a "blessing" for 100% injection of foreign capital, investment in the sector is still rising.

"This means that changes in DNI policies failed to attract investors to enter the business sector, and it is still a paradox that investments are high and imports are still high, so we are changing and encouraging other fiscal incentives," he said.

According to economist Indef Bhima Yudhistira, the 16th PKE showed a signal to the market and a refund to increase the BI interest rate to 6%. The goal is that business people are optimistic that the government offers various incentives when the economy faces many challenges.

"But that's just unreasonable, most of them dealt with in the previous package, which is just an improvement to the existing package, so the impact on investment will be felt over the next five years," Bhima said.

Then after the package, in his opinion, incentives are normal, nothing special. For details, for example, the Export Tax Duty (DHE), which is stored for 1 month in the form of dollars, pays a final 10% value added tax. But if it is converted into a tax IDR of 7.5%. Give 2.5% incentive. Yes, maybe the government is worried that a lot of incentive sales will later have a tax loss.

Bhima pointed out that the expansion of tax incentives for wider sectors, such as the digital economy, is necessary, but this is only a long-term benefit. Even without incentives, the digital economy in Indonesia has rapidly developed. The start of the third year also partly records loss or loss, such as Gojek, so that they do not automatically pay income tax. "In fact, instead of expanding to a new sector, I proposed that the government focus on setting up a tax holiday mechanism, a tax administration that leveraged 200 hours of entrepreneurship for one year and a simple tax refund procedure. PKE 1 to 15 they spoke a lot of incentives, but they did not optimally lead, "he said.

Point 16 of the PKE

Prior to that, Coordinating Minister of Economy Darmin Nasution said that 16 points of the 16th Economic Policy Package (PKE) were to provide tax breaks, release the negative investment list and export revenues from natural resources (SDA).

"In fact, there are two of us who have never named packages: the first is when we cross the trade limit, we do not call the package. Then, on the Single Single Submission (OSS) Web, we do not call it a package because it's more operative / done," he said , when he presented the 16th PKE explanation on Friday (11/16).

Then, according to Darmin, if we see a further normalization of monetary policy in developed countries, especially in the United States, it will continue, as the Bank of Indonesia responded yesterday.

He hopes that the trade war between China and the US, which is now spreading to Japan, may be somewhat reduced. "Prices of raw materials are still volatile, especially for oil, fuel. Of course, this will certainly follow the normalization steps by increasing the level of funds in the central bank, but then we still see that the pressure on the capital flow is still present," he said.

While for Indonesia, according to Darmin, international analysts expect Rupiah to be too cheap, so it's time to buy it. In his opinion, he came out of the analysis of the last two weeks and began to enter into short-term capital on foreign markets and on the stock market.

The government continued Darmin not only to respond to the current transaction, but also to create policies that would entrust the owners of funds, so that both short-term capital inflows and foreign direct investment would enter.

For this reason, the Government, together with Bank Indonesia and the PKI, issued the 16th PKE. First, the expansion of facilities to reduce corporate income tax, in the short term is to extend the provision of tax holidays. Secondly, the release of the negative list of DNI investments is released). The government wants investments to be even bigger, both at home and abroad. Third, the regulation of export revenue (DHF) for natural resources (SDA).

The expansion of tax reduction facilities, tax holidays, according to Darmin, were actually issued through PMK N0mor 35 / PMK.010 / 2018. Expansion of tax holidays in the steel industry and in the field of derivatives and petrochemical sectors. "The first is a group of iron and steel and its derivatives. Iron and steel groups and their derivatives. The second group is Petrochemical and its derivatives," he said.

Other extensions, according to Darmin, are agro-food groups, processing of agricultural products. "Yes, for example, palm oil processing, downstream, rubber, downstream and so on, the second is digital, digital / robotics has almost a minimum number of values, and if small, it does not enter, it must be big," he said. bari / mohar / fba


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