Omnibus Law Taxation has a positive impact on Indonesia’s economic transformation
By: Andry Jozih )*
Business actors welcomed the government policy in carrying out bureaucratic reforms and simplifying regulations through the Omnibus Law concept. These two steps are believed to have a positive impact on economic growth amid the challenges of a global economic slowdown.
As is known, the slowdown in the world economy is still a concern of businesses. Moreover, the World Bank Economist considers that the global economic slowdown is expanding and continues to have an impact on many countries.
Since the World Bank revised the projections of world economic growth from 2.9% to 2.6%, several countries have begun to prepare a series of policies to prevent the impact of the slowdown from affecting the economic performance in their countries, including Indonesia.
That is because the global economic slowdown is feared will impact on the sluggish demand for exports and investment in Indonesia so that it affects economic growth. The government itself targets Indonesia’s economic growth in 2020 to be 5.3% which originates from economic growth which emphasizes the consumption sector.
Support for the application of the Omnibus Law has been increasingly heard since the submission of the draft Bill (RUU) was submitted to the DPR RI. Because, many parties are aware of the importance of this breakthrough to overcome economic problems that are currently still overlapping and less organized.
The public is now very much awaiting the DPR’s decision on the Omnibus Law Bill. The scheme is believed to be the way to resolve permits and overlapping regulations in Indonesia so that investors need not be afraid to invest in Indonesia. Not only is it said to be able to summarize and revise the complexity of the rules, but it also has a positive impact and becomes a solution for Indonesia’s economic transformation.
At least 79 have been identified (tentatively) about 79 Laws and 1,229 articles which will continue to be matured by the Government and become the National Legislation Program (Prolegnas) in 2020. This figure is suspected to be possible to change, adjusting the results of discussions with the Ministry and also related Agencies.
Now the community is increasingly aware of the benefits of the implementation of the Omnibus Law Bill. One of them is, able to eliminate overlaps between laws and regulations. In addition, this bill is considered to be the efficiency of the process of amending or revoking laws and regulations. Not only in one sector, Omnibus Law can overshadow all aspects of laws or regulations in the archipelago. For example, education, economics, investment, and marine.
As a Young Entrepreneur, Sandiaga Salahuddin Uno believes that the direction of national economic policy by the government is correct. The concept of the omnibus law is expected to encourage the realization of investment acceleration. With conducive investment, it can move the business world that is indirectly able to boost the nation’s economy.
Sandiaga Uno also believes that the acceleration of economic transformation from the center of production to distribution will excite small and medium businesses. “So that the business climate is increasingly conducive and this will stimulate businesses to develop more,” he said.
While related to the trade balance deficit, the Former Chairman of the Central Board of Indonesian Young Entrepreneurs Association considers that the government’s efforts to carry out economic transformation through the omnibus law will have an impact on reducing the deficit. One of them is the potential growth of the export value of SME products, which is currently believed to be only 14.5%, which will increase to 30% in 2024.
For the record, currently the Omnibus Law is rolling, if it is approved by the DPR this regulation will revise many laws. There are three omnibus laws that will be submitted in stages. First, the omnibus law on employment creation. Second, the omnibus law on taxation and relating to micro small and medium enterprises.
The government’s step in implementing the Omnibus Law scheme is increasingly wide open. Not only can it unravel the complexity of the existing regulations, but also has a number of positive impacts. Especially for the development of the national economy. The Omnibus Law will specifically renovate every regulation in the economic sector which includes; taxes, development, investment and job availability.
Law expert from the University of Indonesia, Indriyanto Seno Adji also failed to discuss, he said Omnibus Law was not applied because so far Indonesia has used the civil law system. But it can still be changed through government discretion and the impact will be good, that is, it can stop overlapping existing rules. He also said that government discretion in this matter does not require changes to the law.
In a limited meeting chaired by President Jokowi in early January 2020, Joko Widodo assigned BIN to examine the impact of the discussion of the Omnibus Law Bill in the Indonesian Parliament. According to many parties, the president wants to get input and strategic studies from BIN related to the omnibus law, which previously had conducted a number of escort investigations and intelligence gathering to succeed the Omnibus Law legislation process in the DPR-RI. Namely, by minimizing threats, disturbances, and obstacles during the discussion, so that all of them can be resolved.
Based on the facts above, many parties have realized the importance of applying the Omnibus Law scheme as the Law of the world broom which can act as a legal umbrella to improve overlapping licenses, regulations and bureaucracy in Indonesia. And most important is the realization of the development of the national economy and the welfare of all Indonesian people.
)* The author is a social political observer