JAKARTA - The Association of Regional Businessmen (APKB) encourages the government to improve a number of regulations related to the management of bonded areas, customs facilities, and the national investment climate. This step is considered important to maintain the sustainability of export-oriented industries in the midst of global geopolitical challenges and slowing international market demand.
APKB Chairman, Iwa Koswara, said that currently APKB oversees around 705 member companies that operate in various industrial sectors, ranging from Crude Palm Oil (CPO) processing, textiles, footwear, electronics, to various other manufacturing industries. According to him, these companies have a strategic contribution to the national economy through increased exports, job creation, and strengthening the competitiveness of Indonesian industries.
"APKB in principle always supports government policies. However, the regulations implemented must be able to maintain a balance between the functions of supervision and the sustainability of the business world. Legal certainty and ease of doing business are the main factors to maintain investor confidence," said Iwa Koswara.
According to Iwa, there are still a number of administrative and regulatory implementation obstacles that have the potential to hinder the entry of new investments. This condition can affect investor decisions to start business activities in Indonesia if it is not balanced with policies that are adaptive to industry dynamics.
Iwa Koswara, asked the government to reconsider the plan to reduce the domestic sales quota for bonded area companies from 50 percent to 25 percent. According to him, the policy needs to be comprehensively reviewed by involving business actors so as not to have a negative impact on the sustainability of the national industry.
"We respect every effort of the government in strengthening the supervision and governance of the bonded area. However, the plan to reduce the domestic sales quota from 50 percent to 25 percent needs to be reconsidered through a more in-depth study by taking into account the current business conditions," said Iwa Koswara.
He explained that with the current domestic sales quota of 50 percent, there are still companies that experience facility freezing due to administrative constraints and policy implementation. This condition has put pressure on the smooth production, cash flow of the company, and the ability of business actors to retain labor.
"In fact, with a quota of 50 percent, there are still many companies that face the freezing of facilities. Therefore, we question the readiness of the business world if the quota is again cut to 25 percent. This policy has the potential to narrow the scope of the company and add to the burden of the industry, which is currently still facing pressure due to global economic uncertainty and weakening export market demand," he said.
Regarding customs policies, Iwa Koswara explained that all APKB members still adhere to the applicable Minister of Finance Regulation (PMK), including the latest draft PMK which regulates the provision of facilities based on 50 percent of the realization of exports in the previous year. However, the implementation of this policy is still considered to leave a number of problems in the field.
"We see that many companies are still experiencing freezing of customs facilities. In fact, the freezing only concerns export and import facilities, while all tax obligations must still be met. This condition will certainly have an impact on the smooth production, distribution, and business continuity," he said.
He added that external pressure in the form of geopolitical uncertainty and weakening global market demand had led to many purchase orders (PO) from abroad being canceled. As a result, a number of companies had to carry out massive operational efficiencies.
"There are companies that were previously able to absorb around 80 thousand workers, but due to the decline in market demand, the number of workers has decreased to around 20 thousand people. If this condition continues and is followed by regulations that are less adaptive, companies have no choice but to reduce production, postpone investments, and even reduce workers," said Iwa.
In discussing the Draft Minister of Finance Regulation (RPMK), APKB proposed that the mechanism for granting administrative sanctions should prioritize the principle of proportionality. According to Iwa, administrative violations that are mild should be given the opportunity to be corrected without having to immediately be blocked from facilities that can stop business activities.
In addition, APKB also proposed three strategic policies to support national industry growth, namely the implementation of the Domestic Component Level (TKDN) gradually according to industry readiness, improvement of the Export Import Facility (KITE), and optimization of the management of bonded areas as instruments for increasing export competitiveness and job creation.
"We hope that these three proposals can be a solution that balances the interests of the government in carrying out supervision with the needs of the business world to continue to grow and contribute to the national economy," he explained.
APKB also encourages certainty in regulations regarding the local sales mechanism and the use of bonded area fuel for Small and Medium Enterprises (SMEs). According to Iwa, until now there is no comprehensive policy so that the use of fuel goods still faces relatively high expenditure costs.
As one of the important pillars of the national economy, the bonded area contributes to exports of around IDR 1,114 trillion or around 28 percent of the total national exports. A total of 705 APKB member companies also absorb around one million workers, so that the sustainability of the bonded area has a strategic role in maintaining the stability of the Indonesian economy.
At the end of his statement, Iwa Koswara emphasized that APKB would continue to maintain synergy with the government and all stakeholders. The organization is also committed to increasing its members' compliance with all applicable regulations.
"APKB always prioritizes dialogue and solutions. We fully support the government's efforts to create good governance in bonded areas, but we also hope that every policy will consider the real conditions of the business world so that the investment climate remains healthy, exports continue to increase, and employment can continue to be maintained," concluded Iwa Koswara.
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