AmCham Update Vol. 4 #33

US-Indonesia Strengthen Security Ties, SoE Omnibus Regulations, Holiday Allowance Rules Issued, Don't Forget to File Your Taxes

Mar 29, 2023

Indonesia-US Strengthen Cooperation on Defense, Security

US Ambassador to Indonesia Sung Kim emphasized US commitment to strengthen and widen US-Indonesia defense and security cooperation at a meeting with Admiral Yudo Margono, Commander of the Indonesian National Armed Forces (TNI), on March 28. One subject discussed was preparations for the 2023 Super Garuda Shield joint military exercise.

Earlier this month, Ambassador Kim and Admiral Margono also met at the arrival ceremony for the first of five C-130-J-30 Super Hercules aircraft purchased from the US, held at Halim Air Force Base.

President Joko Widodo said at the ceremony the purchase showed the government will continue fulfilling Indonesia’s minimum essential forces in accordance with the allocated budgets.

The remainder of the aircraft ordered by the Ministry of Defense and TNI will arrive gradually in the next few months. Over the last couple of years, defense trade has been an increasingly important element of the bilateral relationship between the US and Indonesia.

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SOE Ministry Issues 3 Omnibus Regulations

The Ministry of State-Owned Enterprises (SoE) has issued three omnibus ministerial regulations, simplifying 45 regulations, repealing provisions that are no longer relevant for SoE development and to make it simpler for SoE leadership to make decisions.

One of the highlights is the SoE Minister's authority to compile the track records of directors and/or applicants for SoE directors, along with a blacklist of candidates with questionable backgrounds. Board of directors members are also prohibited from having multiple sources of income. Pertamina Main Commissioner Basuki Tjahja Purnama praised the policy and said the company has already implemented similar policies for some time.

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AmCham Cares: Reckitt

Reckitt Indonesia through Dettol has launched the Keluarga Sehat Indonesia Kuat (strong healthy Indonesian families) campaign, a collaboration with Dewan Masjid Indonesia (DMI), and Ikatan Dokter Indonesia (IDI), with support from Kompas Gramedia Group as media partner.

The reason for launching this campaign during Ramadan is that, in light of the improved situation as Covid-19 recedes, many Muslims will start going back to mosques and gathering in large numbers.

During the month of Ramadan, especially after the pandemic, mosques will not only be a place of worship but also a place for Muslim communities to interact for a full month, starting from dawn prayers until the night of itikaf. During these activities and interactions, there are many moments that have the potential to spread viruses and germs, such as breaking the fast together, meeting with each other, and worshiping in the mosque.

The goal of the program is to reiterate the importance of health protocols and to maintain the healthy habit initiative of washing hands with soap before every activity, especially before wudu or before entering the mosque. Dettol aims to strengthen access to healthier and cleaner mosque communities by promoting healthy habits to minimize the risk of spreading germs or viruses.

The goal is to reach 1.5 million Muslims in more than 500 mosques across eight cities, providing education by working together with religious leaders and product access at wudu areas in those mosques.

New Manpower Ministry Regulation on Holiday Allowance

Employers have a legal duty to pay the religious holiday allowance, in full, no later than seven days before the Idul Fitri holiday, after Minister of Manpower Ida Fauziyah issued Circular Letter M/2/HK.04.00/III/2023 on the Implementation of Religious Holiday Allowances (THR) Payment in 2023 for Workers/Laborers in Businesses.

Those who have worked continuously for a period of one month or longer are eligible for the allowance. This applies to those who work under unspecified time work agreements (PKWTT), specified time work agreements (PKWT), as well as casual daily workers/laborers. Those with a continuous working period of one month but less than 12 months should be given the allowance proportionally.

The Minister said companies are still required to pay the religious holiday allowance for certain export-oriented, labor-intensive industrial companies that implement adjustments to working time and wages in accordance with Ministry of Manpower Regulation 5/2023. The most recent wage value prior to the wage adjustment is to be used as the base wage for calculating the allowance.

The Minister also said penalties could be imposed on companies if they fail to pay the allowance on time. The process is administrative punishments implemented gradually, starting with a written warning, and progressing through limiting business operations, halting manufacturing, and finally freezing corporate operations.

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CLICK HERE FOR MINISTRY OF MANPOWER CIRCULAR LETTER

Annual Tax Return Reminder

A friendly reminder that the Indonesian tax code mandates the submission of individual annual tax returns (SPT) by March 31, or three months after the end of the previous tax year. Taxpayers can easily submit their SPT online, but must first have their 10-digit Electronic Filing Identification Number (EFIN), which is generally given when your Tax ID (NPWP) is created.

Recognizing the EFIN number can easily be forgotten or lost, the Directorate General of Taxation provides a number of methods to retrieve the EFIN without having to go to the tax office.

Those who recently lost their EFIN can reach out to their local tax authorities via landline, social media, or submit an EFIN request application to their respective e-mail; communicate with the Kring Tax Agent through landline or live chat on www.pajak.go.id; or via the M-Tax application. Alternatively, you can also submit your tax returns in person.

The Directorate General of Taxation said that as of March 27, 9.4 million tax returns had been submitted, with 8.2 million online via e-filing. Other online methods such as e-form and e-SPT saw 971,000 and 3,778 filings respectively, and there were only 249,000 in person.

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Gov't to Import 2M Tonnes of Rice

The government will import 2 million tonnes of rice this year, National Food Agency Arief Prasetyo Adi said. Taken during a meeting between President Joko Widodo and other relevant stakeholders, the decision aims to secure the government’s rice reserves (CBP) at the Indonesian Bureau of Logistics (Bulog). The first 500,000 tonnes are to be imported immediately.

The decision has drawn criticism from politicians and farmers, saying Indonesia is still in the harvest season and its absorption by Bulog is not yet optimized. The Indonesian Bureau of Statistics (BPS) estimates there will be a surplus of rice due to the harvest in the coming months.

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AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard

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