Updates news April 04, 2017

In The News

China contributed largest number of tourists in February
The Jakarta Post, 04/04/2017

China contributed the largest number of tourist arrivals in February, 21.31 percent of the total arrivals of 957,583, according to the Central Statistics Agency (BPS).

BPS chairman Suhariyanto said on Monday that the increase in Chinese tourist numbers, recorded at 194,365, was achieved after the opening of direct flights from eight cities in China to Sam Ratulangi International Airport in Manado, North Jakarta.

“The opening of direct flights has boosted the arrivals of Chinese tourists  to Indonesia,” Suhariyanto told a press conference in Jakarta as reported by tempo.co, compared to the same month last year, the number of Chinese tourists increased by 19.9 percent.

Manado is the closest major Indonesian city to China.
Other main tourist contributors include Australia (10.48 percent), Malaysia (9.76 percent) and Singapore (4.29 percent.)

The government expects to welcome 15 million tourists in 2017, with 2.1 million tourists expected from China. President Joko “Jokowi” Wiododo has signed an agreement with Chinese President Xi Jinping to attract 10 million tourists from China by 2019. (bbn)

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Ministry launches mobile app for SMEs
The Jakarta Post, 04/04/2017

The Cooperatives and Small and Medium Enterprises Ministry has launched a mobile application to help small and medium enterprises (SMEs) across the country get support and assistance from the government and to provide new platform for them to promote their products.

The app, called CIS SMESCO, is Android based and downloadable via Google Play or www.manajemen.cis-nasional.id, the ministry announced in a statement on Monday.

According to Eviyanti Nasution, a senior staff member for venture assistance at the ministry, the application is a program devised by the ministry’s integrated services for cooperatives and SMEs.

The application offers online consultation for SMEs across the country and market information that is regularly updated, said Eviyanti in Yogyakarta on Thursday.
Cooperatives and SMEs can also sell their products through the app, which also offers an online database of the country’s SMEs, she added.

Eviyanti said she hoped the application could help upgrade the businesses of SMEs, thereby leading to a better credit rating and easier access to financial support.

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Tax laws hit working wives
The Jakarta Post, 04/04/2017

The government’s enforcement of tax return form (SPT) scrutiny has led to mounting complaints, particularly from working married women, as many have fallen victim to contradictory legal interpretations in regard to their tax filings.

The tax office received about 9.01 million SPTs as of Saturday, a 9 percent increase from 8.6 million in 2016, according to Directorate General of Taxation data.

However, the increased enforcement as part of the ongoing tax reform — after the ninemonth tax amnesty, has led to severe penalties for working women who make innocent errors in their SPT filing.

Having failed to input her SPT through the online platform, Lisa, 44, a marketing officer, was initially requested to do the filing manually at the tax office.

But later tax officials ordered her to pay Rp 26 million (US$1,950) due to a “tax underpayment” they had uncovered.

“They said that I should have made a joint [SPT] filing with my husband, as specified in the 2008 Income Tax [PPh] Law.

I protested because my previous tax filings were always fine and I have never been informed about that rule,” Lisa told The Jakarta Post on Sunday.

The problem lies in the contradictory interpretation of Article 8 of the PPh Law and Article 2 of the General Taxation System (KUP) Law.

Paragraph 1 of Article 8 of the PPh Law stipulates that the income of a married woman is considered part of her husband’s earnings if she works for a separate employer.

The single-income consideration is not applicable if they decide to split their assets and incomes under a prenuptial agreement, or if the wife wishes to exercise her own tax rights and obligations, as stipulated in paragraphs 2 and 3 of the article.

Meanwhile, Paragraph 1 of Article 2 of the KUP Law stipulates that all taxpayers who meet requirements set by the laws should register for a tax number (NPWP).

This also applies to married women even if they have arrangements with their husbands to split assets and incomes.

“The tax officials argued that the errors in my tax filings in the past were probably passed over. But with more tax officials employed [as part of tax reform efforts], he was sure such omissions were less likely to occur in the future,” Lisa said.

Aulia, 30, a private auditor, said she still held a separate NPWP from her husband and had yet to receive any warning from the tax office. Because of the material consequences, she preferred to keep her problem below the radar.

“I could go to the tax office with my husband and talk about an income-separation plan. But, we’d have to pay more than Rp 8 million in tax underpayments. Thus, I’ve chosen to declare myself as a ‘single’ tax payer,” Aulia told the Post.

The regulations director at the taxation office, Yunirwansyah, said women working for an employer, in accordance to the PPh Law, could keep their own NPWPs and separately file SPTs without incurring any material consequences if they could provide a prenuptial agreement on asset and income separation.
“Without it, the working wife still can have her own NPWP and pay her own taxes, but the tax office needs to merge her income with her husband’s first to calculate the income tax, because a family is regarded as a unified economic unit in the law,” he told the Post.

As a consequence, he said, progressive taxation would be levied on the combined net incomes of the two NPWP holders and each was required to pay tax at proportional rates, leading to underpayments from the income tax that employers had deducted from the wife’s monthly salary.

Tax expert from the Center for Taxation Analysis Yustinus Prastowo called for the tax office to revise the contradictory laws on career women’s NPWPs as part of the tax-reform agenda. “In international practice, both joint and separate filings pay the same level of tax,” he said.

The Directorate General of Taxation’s revenue and compliance director, Yon Arsal, said the tax office had not yet retrieved details on the number of SPTs filed by working women, as it would take further research.

Govt urged to revise contradictory laws on working women’s NPWPs Tax penalties await women with separate NPWPs but united assets

Since the government’s flagship tax amnesty concluded last Friday, Indonesia now faces a mountain of challenges in reforming the country’s directorates general responsible for generating state revenue amid weak public compliance.

The government launched in December last year tax reform teams for the Taxation Directorate General as well as Customs and Excise Directorate General as part of its efforts to improve state revenue collection in the long run.

The move was important because the tax amnesty program only had a short life span of nine months.
The two teams — chaired by Finance Minister Sri Mulyani Indrawati — consist of directors, advisors, observers, journalists and other members with various mandates to reform the two government bodies that are responsible for Rp 1.75 quadrillion (US$131.34 billion) of state revenue in 2017.

The teams held on Monday their second plenary meeting at the Finance Ministry’s headquarters to report to the minister on their work progress and upcoming short-term plans after the tax amnesty, particularly to secure this year’s revenues by improving services and boosting law enforcement.

The government claimed that the reform teams had completed 11 improvements, or “quick wins,” at both directorates general during the first quarter of the year, including on employee integrity and synergy between the two institutions.

On IT systems, the officials have now implemented onlinebased mechanisms for almost all of their services and business processes.

Both directorates general have also merged their customs identity number (NIK) and tax identification number (NPWP) systems into a “single identity and business profile,” which enables exporters and importers to access customs services using only their NPWPs.

Sri Mulyani said all of the measures taken by the reform teams aimed at creating win-win solutions for the government, taxpayers, exporters and importers.

“We want to create a culture of compliance by improving the precision of our work without creating uncertainty for the business world.

On the other hand, good business players have the right to be served well,” she said in a press conference.

The tax reform team, however, still has a great deal of homework to improve the tax database and the tax office’s internal procedures by managing business processes and dealing with recalcitrant taxpayers.

One major task is to ensure that a regulation prohibiting tax officials from meeting taxpayers outside of the tax office is fully implemented.

The government issued such a measure after recent bribery cases allegedly involving officials at both directorates general.

Meanwhile, Indonesian Employers Association’s (Apindo) advisory board member Sofjan Wanandi pointed out the need for government institutions to reduce policy inconsistencies and strengthen coordination with each other.

“We have discussed with the finance minister eliminating things that often confuse people and affect confidence [in the government],” he said, citing a recent policy flip-flop on the requirement for banks to submit credit card transaction data to the tax office.
The requirement was later annulled.

Bloomberg reported on Monday that Indonesia may be a step closer to winning a much-coveted investment grade from S&P Global Ratings after the tax amnesty ended.

“It’s imminent that Indonesia will gets back its investmentgrade rating,” said Gundy Cahyadi, an economist at DBS in Singapore.

“There has been significant improvement made on all fronts. The broadening of the tax base is going to be a plus in terms of how we look at the overall fiscal standing,” he added.

Richard Noonan, a spokesman for S&P, however, declined to comment on the tax amnesty.
The company in January said it might upgrade Indonesia to investment grade in 2017 or 2018 if the country delivered better spending, ensured that deficits were on a declining trend, and moderated government debt.

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Bandung to host 300 cultural festivals
Antara News, 04/04/2017

The Bandung Cultural and Tourism Office plans to host 200 to 300 festivals this year, with the aim of increasing both domestic and international tourist arrivals.

"From the hundreds of event agendas, there are two main events this year, including the Asia-Africa Festival and the Keraton Assembly," Head of the Bandung Cultural and Tourism Office Kenny Dewi Kaniasari stated in Bandung, West Java, on Monday.

Kaniasari said the series of events scheduled to be held are expected to boost the number of tourist arrivals by up to five percent from seven million visitors recorded last year.

"We should be able to increase the figure through a variety of events that will be held throughout the year," she noted.

Furthermore, Kaniasaris office will also strive to attract tourists to the city during the weekdays instead of just on the weekends.

"We will simultaneously promote the citys culinary, heritage, and historical packages as well as increase the hotel occupancy rates from a day to up to three days," she added.

With regard to heritage and historical tourism packages, the office will guide visitors to historical places in the city as well as trace the path charted by the late Soekarno.

"We can include bike riding and walking in the packages, as well as means of public transportation, including buses. Everything will be integrated," she remarked.(*)

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RI to push for G20 working committee on digital economy
The Jakarta Post, 04/04/2017

Indonesia is pushing for the establishment of a global working committee to facilitate discussions on digital economy concepts and technical solutions at the G20 Digital Ministers Meeting in Düsseldorf, Germany, this week.

The conference is aimed at sharing experiences on how to address issues of wealth distribution, financial inclusion and workforce management.

The Indonesian delegation to Dusseldorf will be led by Communications and Information Minister Rudiantara, who said he would highlight the unique digitalization trends happening in Indonesia.

The government claims the country is a digital technology success story when it comes to aspects like the sharing economy, workforce digitalization and financial inclusion, with the emphasis being on digital solutions to improve business performance.

Workforce digitalization, for instance, is reflected in all-round ordering services like Go-Jek.
“After showcasing these merits, we have an action plan that includes workshops and partnerships to implement these ideas. Whoever wants to join us is welcome,” Rudiantara said on Monday.

Germany took over the G20 presidency on Dec. 1, 2016. The G20 Digital Ministers Meeting will take place from April 6 to 7. (tas)

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Travel agents, airlines told to offer government's 10 tourist destinations
The Jakarta Post, 04/04/2017

The government has told travel agents and aviation companies to start offering the 10 new tourist destinations it has designated as the new Balis to provide travelers with alternative places to go.

Airlines and travel agents have to offer more tour packages to the 10 destinations being developed by the government, said the head of the Tourism Ministry’s 10 prioritized tourist destination promotion, Hiramsyah Sambudi Thaib.

“If currently, they offer two tour packages to Bali and one package to Manado, for example, they have to start offering two packages to Manado and one package to Bali,” said Hiramsyah as reported by tempo.co on Monday.

For that, air transportation should be improved because most tourists used airplanes to reach the destinations, said Hiramsyah, adding that the government would improve the status of many airports to make them international hubs.

The airports that are to be improved include Adi Sumarmo Airport in Surakarta, Central Java, Kualanamu Airport in Medan and Lombok International Airport in West Nusa Tenggara.

The 10 new tourist destinations include Lake Toba in North Sumatra, Tanjung Kelayang in Bangka Belitung, Tanjung Lesung in Banten, Thousand Islands regency in Jakarta, Borobudur in Central Java, areas of Bromo, Tengger and Semeru in East Java, Mandalika in West Nusa Tenggara, Labuan Bajo in East Nusa Tenggara, Wakatobe in Southest Sulawesi and Norotai in North Maluku. (bbn)

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Energy Ministry Push for Regulation on Euro 4 Fuel
Tempo.co, 04/04/2017

The Environmental and Forestry Ministry has called on the Energy and Mineral Resources Ministry to issue a regulation on Euro 4 fuel specifications.

"We have called for a special ministerial regulation on the fuel specifications," Karliansyah, director general of pollution and environmental damage at the Environmental and Forestry Ministry said on Monday, April 3, 2017.

Karliansyah added that the regulation will serve as a follow-up to the issuance of the Environmental and Forestry Ministry regulation No. 20/2017 on emission standards for new types of vehicles. The regulation requires car manufacturers to implement Euro 4 emission standards.

Although a bill on the implementation has been issued, the standards cannot be implemented directly because manufacturers and the government needed time to prepare the technology and the fuel supply.

Karliansyah explained that imports could be a feasible option to be taken by state oil and gas company Pertamina to meet demands on Euro 4 fuel.

"There is an option to import [Euro 4 fuel], and it is possible that the option will be executed," Karliansyah said.

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