Foreign investors demand more reforms

In a meeting held by the Foreign Ministry on Tuesday, representatives of foreign business communities and ambassadors said they appreciated ongoing progress, but some of the most common problems still remained.
In terms of tax, Japan External Trade Organisation president director Daiki Kasugahara pointed to a recent shift in procedures that resulted in operationl problems for Japanese firms.
The diplomats and executives also highlighted issues of different handling mechanisms for imported goods and complicated work permit procedures.
Indonesia requires importers to bring in goods that meet local standards, which has resulted in numerous inspections at ports upon arrival, even when the importers are repeat businessmen and the goods already meet international standards.
The multiple inspections add to the layers of difficulty faced by businessmen and prolong customs clearance and cargo release at ports, while the government aims to reduce dwell time at ports in accordance with its 13 th economic policy package.
Government data show that dwell time varies from port to port. Tanjung Priok Port, which is the country’s largest and manages the heaviest flow of goods, has a dwell time of 3.5 days, compared to Singapore’s one day and Malaysia’s three days.
The dwell time is even longer at other ports, with Tanjung Perak Port in East Java reporting 5.2 days and Belawan Port in North Sumatra 4.3 days.
“We believe if Indonesia wants to rely more on international standards, you’ll avoid some troublesome situations where you have to fly in and out some of the experts (to assist in) each and every shipment,” said EU Ambassador to Indonesia and Brunei Vincent Guerend.
In terms of work permits, UK Ambassador Moazzam Malik highlighted the piles of paperwork needed to renew permits every six months.
Investment Coordinating Board head Thomas Lembong, who attended the event, acknowledged that tax, the predictability of regulations and work permits were the top three complaints from foreign businessmen.
Thomas – along with other government officials, such as economic policy effectiveness and acceleration task force deputy chairman Sofjan Wanandi and Communications and Information Minister Rudiantara – assured the businessmen that their concerns had been taken into account by the government.
The government is preparing for the revision of four tax laws to ease tax matters and payment methods, such as the General Taxation Law.
Rudiantara said that starting next year, incoming goods could meet local standards through a process carried out abroad.
“That way, you won’t have to bring your experts to Indonesia anymore.”
Despite the existing problems, the diplomats said they had seen progress as a result of the 13 economic packages.
“Tangibly, I get fewer complaints from my companies, so that’s a sign of improvement. I also see that the goodwill and efforts to resolve the problems are there.
“I think things are really improving,” Swedish Ambassador Johanna Skoog said.