Indonesia proposes measures to boost economy, jobs

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Proposals aimed at boosting the Indonesian economy and job creation feature in an omnibus law presented to parliament in February 2020 that would amend 1,244 articles in 79 different laws. Further implementing regulations would clarify the changes. A second omnibus law addresses tax reforms.

Highlights

Proposed measures in the omnibus job-creation law include:

  • Changes to expatriate license requirements; employee termination, severance pay and post-termination benefits; employment of contractors; and employees’ rights in the event of a transfer of undertaking
  • Simplification of business processes, such as company registration, filings and licensing requirements
  • Introduction of new arrangements for economic zones
  • Sector-specific measures, including government tax and fiscal incentives, for mining, forestry, tourism, transportation and other sectors

The omnibus tax-reform law aims to increase tax revenues and would amend seven current laws. The proposals are divided into six sections and include arrangements for taxing foreign citizens and the introduction of time tests to differentiate foreigners from Indonesian citizens for tax purposes.

Related resource

Andry Lie
by Andry Lie

Principal, Mercer Region Market Development

Fiona Webster
by Fiona Webster

Principal, Mercer’s Law & Policy Group

Stephanie Rosseau
by Stephanie Rosseau

Principal, Mercer’s Law & Policy Group

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