Gov't Considering National Tourism Tax on Airfares
The government is exploring the implementation of a tourism tax on flight tickets. The proposal is under review and will be discussed in a coordination meeting held by the Coordinating Ministry for Maritime Affairs and Investment, said Minister of Tourism and Creative Economy Sandiaga Uno.
Despite the aim to further contribute to the Indonesia Tourism Fund, the potential tourism tax is already facing opposition from a number of stakeholders, including Garuda Indonesia, the Indonesian Tourism Industry Association (GIPI) and the Indonesian Aviation Service Users Association (APJAPI), who see it as a risky move. Concerns have been raised regarding the potential increase in ticket prices which could burden passengers, as well as the fairness of singling out air transportation for fees while other modes remain unaffected.
The industry is also urging the government to reassess multiple factors including clarity, operational procedures, collection methods, supervision and transparency in the utilization of funds. Previous levies imposed on the tourism sector frequently failed to benefit the industry, with the majority of the revenue ending up being used by regional budgets, said Chairman of the Indonesian Tourism Industry Association (GIPI) Hariyadi Sukamdani.
Related Links:
- https://www.kompas.id/baca/english/2024/04/22/en-pemerintah-kaji-sisipkan-iuran-pariwisata-dalam-tiket-penerbangan?open_from=English_Page
- https://en.tempo.co/read/1860315/garuda-indonesia-rejects-tourism-fee-on-flight-tickets-saying-it-burdens-passengers
- https://ekonomi.bisnis.com/read/20240424/12/1760195/heboh-iuran-pariwisata-via-tiket-pesawat-begini-respons-pengusaha
BI Hikes Interest Rate to 6.25%
Bank Indonesia (BI) has raised its benchmark 7-Day Reverse Repo interest rate by 25 basis points (bps) to 6.25 percent to tackle the depreciating rupiah, after it rose to Rp 16,155 per US dollar on April 24. It is a proactive measure to keep inflation within the target range of 1.5 percent to 3.5 percent, said BI Governor Perry Warjiyo. BI also raised the deposit facility rate to 5.50 percent and lending facility rate to 7 percent.
Perry said the rupiah would stabilize at around Rp 16,200 per US dollar this quarter, strengthen to Rp 16,000 next quarter, and Rp 15,800 by the end of the year. He also expects limited escalation in Middle East tensions and predicted the US Federal Reserve would cut interest rates in December. Bahana Securities Economist Satria Sambijantoro anticipated another 25 bps rate hike next month to narrow yield differentials and bolster Indonesia’s financial account.
Bank Mandiri Chief Economist Andry Asmoro noted spiking commodity prices due to tensions in the Middle East. Pressure on the rupiah continues to stem from concerns regarding President-elect Prabowo Subianto’s proposed free meals and milk program for schoolchildren, which is expected to cost $28.5 billion, according to The Financial Times.
Related Links:
- https://katadata.co.id/finansial/makro/6628bcccdf88d/bi-naikkan-suku-bunga-jadi-6-25-di-tengah-pelemahan-rupiah
- https://en.tempo.co/read/1860393/bank-indonesia-raises-key-interest-rate-to-6-25-to-bolster-rupiah-stability
- https://www.reuters.com/markets/asia/indonesias-central-bank-delivers-surprise-rate-rise-support-rupiah-2024-04-24/
Luhut Talks Investment with Singapore PM
Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan held discussions with Singapore Prime Minister Lee Hsien Long and Deputy Prime Minister Lawrence Wong to explore potential collaboration between the two nations, highlighting cross-border carbon capture and storage (CCS) projects as a significant opportunity for both nations to advance their low-carbon industries, including steel and sheet glass production.
The government aims to conduct appraisals this year to facilitate the construction of CCS infrastructure in the Sunda-Asri Basin, West Java.
Other investment projects include a seaweed cultivation trial covering 50,000 hectares projected to be worth $2 million by 2025, and construction of the Bali International Hospital in the Sanur Special Economic Zone led by state-owned Pertamina Bina Medika Healthcare Corporation. Deputy Prime Minister Wong expressed Singapore’s interest in the projects and affirmed the country’s readiness to conduct preliminary studies for these investment opportunities.
Related Links:
- https://katadata.co.id/berita/industri/6628d2e342402/luhut-jualan-tiga-proyek-ke-singapura-apa-saja
- https://katadata.co.id/ekonomi-hijau/ekonomi-sirkular/6628aaf8eaada/luhut-bertemu-pm-singapura-bahas-kerja-sama-penyimpanan-karbon
- https://ekonomi.bisnis.com/read/20240424/9/1760071/bertemu-calon-pm-singapura-lawrence-wong-luhut-bahas-kerja-sama-ccs-hingga-blue-food
Meagre 0.9% IDX Rise After Interest Rate Rise, Prabowo Victory
The Indonesia Stock Exchange (IDX) Composite (IHSG) index rose by 0.9 percent to close at 7,174.53 on April 24, influenced by Bank Indonesia’s (BI) decision to raise its benchmark interest rate to 6.25 percent. Six sectoral indices contributed to the index’s rise, including the technology sector, which notably supported the IDX with a 2.36 percent increase.
The index also rose following the official declaration by the General Elections Commission (KPU) of Prabowo Subianto and Gibran Rakabuming Raka as president-elect and vice president-elect for the 2024-2029 period. This declaration came after the Constitutional Court rejected all complaints related to the 2024 presidential election results.
Related Links:
- https://www.thejakartapost.com/business/2024/04/25/idx-composite-closes-up-0-9-after-presidential-election-announcement.html
- https://jakartaglobe.id/business/bis-rate-hike-sinks-idx-investors-worry-about-credit-slowdown
AmCham Attends Thermo Fisher Scientific Day
AmCham Indonesia attended the first-ever Thermo Fisher Scientific Day, held on April 24, to commemorate the opening of its inaugural office in Jakarta. Key partners and industry leaders attended the event to discuss opportunities for scientific advancements in the fields of climate change, healthcare transformation and sustainability solutions in Indonesia.
The office opening marks a pivotal step in its commitment to provide closer support to Indonesian partners and nurture local talents as an integral effort to drive scientific progress. Thermo Fisher representatives signed memorandums of understanding (MoUs) with two distinguished Indonesian institutions – the National Battery Research Institute (NBRI) and Mandaya Hospital Group.
“We congratulate Thermo Fisher Scientific’s inauguration of its first office in Indonesia,” said US Embassy Chargé d’Affaires Michael F Kleine. "The US Mission to Indonesia looks forward to the company’s continued advancement and engagement in Indonesia's robust healthcare, research, biopharma, renewable energy development and climate solutions industries."
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Members Announcement: OCS Indonesia
OCS Indonesia, a leading facility services and facilities management (FM) provider, joined forces with Diversey Indonesia, a Solenis company, to spotlight key trends in FM relevant to diverse industries in Indonesia. The event, Global Facilities Management Trends in the 2024 Indonesian Market, gathered participants including industry experts, leaders, and key account customers of OCS Indonesia.
This inaugural global FM conference in Jakarta featured keynote speakers including Frank Ngoh Koh Fui, President of the Singapore International Facility Management Association (SIFMA); Ricardo Purba, COO of OCS Indonesia; and Karel van Gorp, VP Marketing MEA and APAC/Global VP Consumer Brands of Diversey.
Moderating the discussions were Andi Saputra, CFO of OCS Indonesia, and Amit Menon, Country Leader of Diversey Indonesia; while panelists included Rafael Jeffry A Sani from EMC², Mehdi Zaidi from Maxx Coffee & Sunshine Food Group, Fikri Mohammad Hakim from Sanur Special Economic Zone (SEZ), and Baoa Sinaga from OCS Indonesia.
Yohanes Jeffry Johary, Managing Director of OCS Indonesia, emphasized the event's goal of sharing the latest insights and advancements in the industry. “This event extends the discussions from the Singapore Facilities Management Expert Summit by the SIFMA to our local FM market in Indonesia,” he said.
“We cover various aspects of FM, addressing global challenges as opportunities. We are thrilled with the insightful discussions, innovative ideas, and shared commitment to improving facilities management in Indonesia,” he added.
Diversey, a Solenis company, continues to refine its solutions, offering a sustainable range of products, services, and technology. They leverage over 100 years of industry-leading expertise to deliver effective, cost-efficient, and sustainable solutions.
Get to Know Our Members: APL
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Anugerah Pharmindo Lestari (APL), a member of Zuellig Pharma, has been serving the Indonesian healthcare industry since 1985. Trusted by global pharmaceutical companies, its 3,000 passionate employees ensure seamless distribution, commercial, and digital services across Indonesia’s diverse geography. With 60,000 medical facilities reaching across 434 cities, supported by a cutting-edge national distribution center, a regional hub, 25 pharmaceutical-grade warehouses, and partners, APL is driving digital innovation to advancing healthcare accessibility.
Deeply committed to sustainable development, APL’s initiatives are centered on improving health outcomes, nurturing talent, respecting the environment, and upholding the highest standards of integrity. As it continues to evolve, APL remains dedicated to enhancing its ability to meet community healthcare needs and support the evolving healthcare landscape.
Now is the Time to Join AmCham!
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Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Lydia Ruddy and written by the AmCham Staff. Paul L Goddard is the Managing Editor.
