Update News January, 09 2018

In The News

Tax revenue target reachable: Finance minister
Antara News, 09 January 2018

Jakarta (ANTARA News) - Indonesian Finance Minister Sri Mulyani said the country`s tax revenue target set at Rp1,424 trillion for 2018 or 20 percent higher than last year`s realization was reachable.

"The 20 percent growth is still within reach," she said in a dialog with a number of economic observers and chief editors here on Monday.
She said several sectors such as agriculture, manufacturing and trade would again contribute to state revenues this year like in 2017.
She however admitted that some other sectors still remained weak and could not yet contribute optimally to tax income.

"We will not implement `one size fits all` principle but we will consider all sectors. Tax tevenue and spending targets have been set in such a way so that the national budget could be a driving force instead of hurdle for the economy," she said.

In view of that she believed the tax revenue target that grew by 20 percent from last year would be achieved in line with the realistic calculation used when drafting the 2018 budget.
The calculation was based on an assumption of growth of 5.4 percent plus 3.5 percent inflation and four percent extra efforts that have routinely be made.

"We also have AeOI (agreement on exchange of information). So after we first enforced it without well information now we have had good information meaning if one has to pay tax he has to do it," she said.

By using the data in addition to improving budiness process in tax collectio. she said 
tax authorities` performance would now be more orderly and tax payers` compliance would improve.

"What is challenging is tax officers` behavior. We have improved the fiscus approach and method of conveying so we can assure that cases like use of figures from the sky or finding fault would not happen again," she said.

Tax revenues until the end of December 2017 were recorded reaching Rp1,151 trillion or 89,7 percent of the target set for the 2017 budget. 

Revenues from non-oil and gas income tax were recorded at Rp596.9 trillion, value added tax and import taxes at Rp480.7 trillion, property tax at Rp16.7 trillion, othervtaxes at Rp6.75 trillion and oil and gas income tax at Rp49 96 trillion.

The non-oil and gas income tax receipts were also contributed by tax funds from Tax Amnesty Program that ended in March 2017 reaching Rp12 trillion.

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BPTJ Urges Anies Baswedan to Keep Ahok`s Motorcycle Ban
Temphco, 09 january 2018

TEMPO.CO, Jakarta - The Greater Jakarta (Jabodetabek) Transportation Management Agency or BPTJ urged Jakarta Governor Anies Baswedan to study the decision of Supreme Court, which annulled Ahok’s regulation on motorcycle ban through Jalan M.H. Thamrin.

Head of BPTJ Bambang Prihartono said that his institution will study the decision of Supreme Court. However, the Provincial Government of Jakarta should be able to work on for the motorcycle ban regulations can be maintained.

"Whatever the reason is, the local government should be struggling to organize Jakarta’s transportation to be better, because the authority is in the region," said Bambang when contacted by Tempo on Monday, January 8, 2018.

On its verdict, the Supreme Court granted the request from Yuliansah Hamid and Diki Iskandar to annul the Jakarta Governor Regulation No. 195 of 2014 which was made in the Ahok era, related to motorcycle traffic restrictions on Jalan M.H. Thamrin, Central Jakarta.

"To grant the petition for judicial review from Yuliansah Hamid and Diki Iskandar as the petitioners," said the Chief of Supreme Court Irfan Fachruddin, as quoted in the copy of Supreme Court verdict on Monday, January 8, 2018.

BPTJ sees that the regulation needs to continue to be applied for broad interest, which is safety. Therefore, BPTJ will coordinate with Jakarta Government to keep applying motorcycle ban regulation. "We see it from the point of view of transportation safety," he said.

In fact, BPTJ has recommended the Jakarta government to increase the extension of motorcycle ban in Thamrin and Jenderal Sudirman, when the Governor of Jakarta Anies Baswedan has just been inaugurated. "We have proposed the motorcycle restriction plan with the extension of location from Hotel Indonesia (HI) Roundabout to Bundaran Roundabout."

According to him, restriction on motorcycles is very important to reduce accidents. Motorcycle contributes to 70 accidents that happened on the road.
Moreover, motorcycle ban in the current location has provided cost savings transportation as Rp296 million per day from Rp103 Millar per year. 

The criteria for saving are travel time, cost, vehicle operation and accident rate. "In the future, motorcycles will be used only for short distances such as from house to station, so it will be parked near the station," said Head of BPTJ Bambang Prihartono.

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Kadin calls for avoiding noise in political year
Antara News, 09 January 2018

Jakarta (ANTARA News) - The Indonesian Chamber of Commerce and Industry (Kadin) expects all parties to avoid creating political noise in the political year 2018 as businesses need a peaceful atmosphere that supports the continuity of their business.

Chairman of Kadin Indonesia, Eddy Ganefo, stated here on Monday that political noise has a great impact on business sustainability.
"Many investors will postpone their investment until the noise is over, and people will delay and hold back their economic activity until the disturbance ends," he noted.
Therefore, Ganefo suggested that the government and the security apparatus should ensure security while entering the political year, starting from 2018 until 2019.

Generally, business actors always tend to withstand business expansion in political years if the situation is not conducive, or there is commotion, and wait for a conducive time again to continue business activities.

According to him, the political dynamics that emerged in this political year must be managed well. Let the economy keep going well, so that the economic achievement in 2017 will increase significantly in 2018 and 2019.

However, he expressed belief that the influence of political dynamics in the year of simultaneous regional head elections (Pilkada) and presidential elections (Pilpres) is not significant to the business world. Some government policies have kept the economy going well.

President Joko Widodo (Jokowi) has issued a policy that in 2018, the government would take advantage of village funds for labor-intensive activities, which means there will be strengthening of people`s purchasing power.

In addition, some businesses actually develop into the political year; for example, food and beverage industry, t-shirts, and print industry."Usually in pilkada and pilpres, there will be many activities. This will increase certain industries, such as food and beverage, hotel occupancy, and transportation," he revealed.

For that, he suggested that business actors would remain optimistic in running their business when entering the political year.Eddya is confident that the government and the security forces will work hard to create a sense of peace in the implementation of Pilkada and Pilpres.

The year 2018 is a political year, in which there will be hundreds of simultaneous regional elections and a warming up to the 2019 presidential election.  

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INKA to build factory to produce high speed trains
Antara News, 09 January 2018

Jakarta (ANTARA News) - The state-owned rolling stock manufacturing company PT Industri Kereta Api (INKA) said it hopes to build a new factory in Banyuwangi to produce high speed trains this year. 

The present market development forced the company to set eye on high technology, acting chief executive of PT INKA M. Nur Sodiq said here on Monday pointing to government plans to build medium speed train to link Jakarta and Surabaya, 

Sodiq said unless the company has the technology and the factory it would not have chance of taking part in the big project, adding, "We would not be invited to the project tender."
He said INKA has been quite competitive in passenger train construction with 72 percent produced by Indonesians. 

He said the Banyuangi factory would have capacity four times larger than that of the Madiun factory."Our target is three units of carriage per day or twice more than 1.5 units per day on the average in Madium. 

Sodiq said the project is in the phase of feasibility study, adding land clearing has been wrapped up.
Construction will be in two phases with the first phase to cost around Rp600 billion and the second phase Rp400 billion, bring the total cost toRp1 trillion.

The factory is expected to come on stream in mid 2019, Sodiq said. Executive Vice President of Inka Bambang Kushendarto said in improving specifications , the company recruits foreign experts such as from Japan and Germany. 

INKA has to increase its production capacity to meet growing demand including from abroad such as from Bangladesh, Bambang said.
Demand is also growing in the country such as from light train transit (LRT) project in Palembang and Greater Jakarta and long distance train of PT KAI, he said.  

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Minister Encourages Investors to Take Up Airport LRT Route
Tempo.co, 09 January 2018

TEMPO.CO, Jakarta - Minister of Transportation Budi Karya Sumadi has called on investors, who are interested in investing in the Light Rail Transit line (LRT), to invest in the airport route line because of its potential in economic value.

"There a number of very potential routes, especially the ones that goes to and from the Soekarno-Hatta Airport, either from the Halim Airport to Soekarno-Hatta or the southern areas, which would start with the MRT before being continued to BSD and Alam Sutera areas; these are surely paths with economic values," Sumadi stated in Jakarta on Monday.

He revealed that the government would welcome investors who propose strategic projects, including the LRT, as the state budget cannot cover the entire cost of infrastructure projects.
One of the companies that have expressed interest in the LRT project is PT Ratu Prabu Energi Tbk., which is a company that works mainly in the oil industry.

"About a year ago, PT Ratu Prabu had shown their interest in us, and we would like to welcome anyone from the private sector seeking to establish an investment in Indonesia, as the state budget is insufficient to finance the whole development, especially the LRT," he noted.

However, he stated that his ministry would first conduct an initial study on prospective investors regarding their track record, through proposal submissions and 'beauty contests.'

"Surely, there is an obligation for PT Ratu Prabu to partner up with an operator; essentially, the government is opening the opportunity widely, and there needs to be an agreement so that it does not become a boomerang for us," he remarked.

Moreover, he stressed that his ministry is not turning down the possibility of simplifying regulations in order to ease investors to involve in the development of infrastructure projects.

"The ministerial regulations certainly should not be an obstacle for investments to enter Indonesia; we are open for discussions should there be any regulations that are not possible. I think it can be implemented as long as it possesses good governance," he revealed.

As for the value of investment, which is believed to reach Rp400 trillion, the minister declined to make a comment."I would rather not comment on the scale. The LRT project for the Jabodebek is valued at Rp29 trillion, meaning it is 13 times as much. We want it to be done gradually as it has been portioned, unlike the previous time," he pointed out.

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JCI Opens with 0.13 Percent Gain
Tempo.co, 09 January 2018

TEMPO.CO, Jakarta - The Jakarta Composite Index (JCI) opened at 6,393.88 this morning, or up by 0.13 percent from yesterday's closing.
Binaartha Securities' analyst Reza Priyambada said the index is likely to stay on an uptrend, in line with the positive sentiments from within Indonesia and overseas.
"The JCI's current position, which is still below its latest record of 6,445, provides an opportunity for higher gains," he said on Tuesday, January 9.

He said that the JCI's gain is supported by the re-entry of big-cap stocks as top gainers, as well as the release of the Indonesia's foreign exchange reserves data. Bank Indonesia (BI) has announced that forex reserves stood at US$130.20 billion at the end of December 2017.

Nevertheless, Reza said that profit-takings may occur; triggered by the index's appreciation."Beware of profit taking by investors seeking to gain from the JCI's climb," he reminded.

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Toyota Unveils Self-driving Concept Vehicle for Rides, Deliveries
Tempo.co, 09 January 2018

TEMPO.CO, Las Vegas - Toyota Motor Corp announced on Monday a self-driving electric concept vehicle that it will tailor for companies to use for tasks like ride hailing and package delivery, underscoring how automakers are no longer simply building cars but also providing services to go with them.

The world’s second-biggest carmaker said it plans to begin testing the e‐Palette concept vehicle in various regions, including the United States, in the early 2020s. It will come in three sizes: a bus-sized vehicle, a shuttle and a small delivery vehicle sized to run on sidewalks.

Toyota said at the CES global technology conference in Las Vegas that it will work with companies including Amazon.com Inc, Chinese ride-hailing company Didi Chuxing Technology Co, Pizza Hut, Mazda Motor Corp and Uber Technologies Inc[UBER.UL] to build the vehicle and its hardware and software support and develop connected mobility products.

After intense research and development in self-driving technology, automakers are beginning to unveil clearly defined autonomous vehicle strategies and looking to apply the technology to uses like ride services, shuttle services and package deliveries.

Toyota took longer than rivals to warm to the idea of autonomous vehicles, but has committed $1 billion through 2020 to develop advanced automated driving and artificial intelligence technology. It plans to begin testing cars that can drive themselves on highways around 2020.

“This announcement marks a major step forward in our evolution towards sustainable mobility, demonstrating our continued expansion beyond traditional cars and trucks to the creation of new values including services for customers,” said Toyota President Akio Toyoda in a statement.

The vehicle features an open control interface enabling Toyota’s partner companies to install their own automated driving system. Toyota’s so-called “guardian” technology will then act as a safety net, the company said.

Carmakers, tech companies and other service providers have partnered on self-driving projects over past two years, due to the difficulty and high cost of developing such technology alone.

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Central, Jakarta governments talk TOD projects
The Jakarta Post,08 January 2018

State-owned Enterprises Minister Rini Soemarno and Jakarta Deputy Governor Sandiaga Uno met on Monday to discuss the construction of transit oriented development (TOD) projects to provide residences near MRT stations.

“We have discussed the possibility of cooperation between state-owned enterprises [SOEs] and city-owned enterprises [COEs],” said Rini after having breakfast with Sandiaga in Jakarta as reported by kompas.com.

Space would be provided in TODs for micro, small and medium enterprises (MSMEs) and cooperatives to open businesses, she added.
Rini said she had also discussed with Sandiaga the development of urban infrastructure, particularly transportation infrastructure in Jakarta, including the renovation of railway stations.
Meanwhile, Sandiaga said the city administration and SOEs Ministry had discussed several ways the plan could be implemented.

“There are a number of projects that will be implemented in the near future to accelerate development in Jakarta that could trigger economic growth and create jobs,” Sandiaga said.
Among topics discussed was a TOD project at the under-construction Tanjung Barat Station in South Jakarta, Sandiaga added.

The TOD at Tanjung Barat Station is being developed on 1.5 hectares. The project, which is expected to be completed in 2019, will see the construction of 1,232 apartments, 415 of which will be sold commercially, while the others would be allocated to low-income people. 

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AirAsia to close Surakarta-Kuala Lumpur route
The Jakarta Post,08 January 2018

Low-cost carrier AirAsia is set to close on Jan. 16 its route from Surakarta in Central Java to Kuala Lumpur.AirAsia Berhad commercial head Spencer Lee told Antara news agency that the closure was due to commercial reasons.

The airline is currently spreading the news among passengers through email and text messages. Those affected by the closure will receive a full refund or be allowed to change their flight by taking off from Semarang, Central Java, or Yogyakarta.Despite the move, Lee assured the carrier was still committed to adding more flights to Indonesia this year.

Meanwhile, Purwanto, operation and service department manager of state-owned airport operator PT Angkasa Pura I at Adi Soemarmo International Airport in Central Java, said the operator had heard about the news, but has yet to receive an official confirmation from the carrier.“Based on our data, the average number of passengers for the route is relatively high, up to 70 percent [capacity],” Purwanto said.