TKDN Policy Criticized 400 Economy, Ministry Of Industry: We Have Evaluated And Reformed

Spokesperson for the Ministry of Industry Febri Hendri Antoni Arif. (Photo: Doc. ANTARA)

The Ministry of Industry (Kemenperin) has responded to the pressure of 400 economists who are members of the Indonesian Economist Alliance.

The specific is the evaluation of TKDN in sectors that do not yet have quality local suppliers and guidance in local industries that strengthen the investment side of human resources, technology transfer and infrastructure development.

Responding to this, the Ministry of Industry claims to have done what had been demanded through TKDN policy reform. TKDN reform is mainly aimed at calculating the TKDN score more easily, cheaply and faster and certainly not rigid.

"The Minister of Industry (Menperin) Mr. Agus Gumiwang Kartasasmita and her staff at the Ministry of Industry have evaluated and reformed the TKDN policy. Evaluation and reform are based on public votes, industry, economist investors and all are involved in the industrial ecosystem, especially industries that produce TKDN products," said Ministry of Industry spokesman Febri Hendri Antoni Arif in a written statement, quoted Thursday, September 11.

As a result, a Regulation of the Minister of Industry (Permenperin) Procedures for Calculating TKDN which pays close attention to the needs and interests of local industries, especially small and medium industries in obtaining TKDN certificates.

The new regulations are considered to be able to increase the competitiveness of industrial companies and their products, absorb greater labor, bring in investment from within and outside the country, and most importantly strengthen the ecosystem and supply chain of domestic industry.

According to Febri, the Ministry of Industry is taking steps to reform TKDN because the old regulations that have been in effect for more than a decade need to be evaluated and adapted to the current needs of domestic industries.

Especially in response to domestic requests originating from government needs or household needs for certain manufacturing products.

TKDN reform is carried out with emphasis on cheap, easy, fast and incentive-based principles.

"In the past, the certification process could take more than 20 working days with relatively high costs, now through a new scheme, certification can be completed in just 10 working days. For small industries, it is enough for three days through the self-declare mechanism," he said.

The reform also provides additional incentives, such as a minimum TKDN value of 25 percent for companies to invest and absorb local workers to an additional 20 percent for those conducting research and development.

"That way, the calculation of TKDN is no longer just an administrative obligation, but is a reward system that encourages innovation and investment," said Febri.

Through TKDN reform, said Febri, the Ministry of Industry actually pays special attention to small and medium industry players (IKM).

IKM actors are now getting convenience in submitting TKDN certification, including the self-declare scheme which is valid for five years.

"With the self-declare method, IKM can more quickly obtain TKDN certificates at very low cost, and can even reach TKDN values of more than 40 percent without administrative complexities as before. This is a form of affirmation so that IKM can be parallel to medium and large industries," he explained.

Regarding sectoral TKDN, such as TKDN for HKT which is considered rigid and hinders investment, the Ministry of Industry only makes policies on the calculation and fulfillment of TKDN in sector products whose TKDN Threshold has been determined by other ministries/agencies.

The regulation of TKDN calculation procedures also adjusts the needs and interests of industry and investors in the sector. In fact, foreign investors, especially investors or business people who have not been able to build production facilities in Indonesia, expect the sectoral TKDN policy to continue.

"Alasan mereka, kebijakan TKDN sektoral membantu mereka dalam persaingan di pasar domestik. Jadi, kebijakan TKDN sektoral, terutama bagi produk industri dalam negeri yang menyasar atau memenuhi kebutuhan rumah tangga dan swasta juga mereka harap tertahankan. Dan kami juga sudah evaluasi dan memperbaiki kualitas regulasi tersebut dalam reformasi kebijakan TKDN," tutur dia.

Febri assessed that TKDN reform was also born from the results of the evaluation of various obstacles that had been faced by business actors, ranging from the high cost of obtaining certificates, the validity period was too short to the phenomenon of TKDN washing by irresponsible parties.

In addition, the certification process is carried out digitally, thereby minimizing contacts between the implementing verification and the TKDN certification applicant.

"Through the new regulations, the TKDN certificate is now valid for up to five years with a stricter monitoring mechanism. We have also formed a Supervisory Team under the Inspectorate General to ensure that there are no more practices of certification manipulation, fraud that are gaps in corruption, both by business actors and verification agencies," he explained.

Untuk diketahui, Aliansi Ekonom Indonesia menyampaikan, kebijakan TKDN yang kaku berdampak terhadap kenaikan biaya produksi dan belum menghasilkan produk berkualitas, sehingga menghilangkan daya saing produk Indonesia di pasar global.

Kebijakan TKDN kaku juga memunculkan celah korupsi dalam perizinan dan pengadaan.

Aliansi itu juga menyampaikan dampak buruk penerapan kebijakan TKDN terhadap iklim investasi, harga produk di tingkat konsumen, daya saing industri, alokasi sumberdaya, potensi pelanggaran aturan WTO, perdagangan internasional Indonesia dan akses Indonesia pada pasar global.

Aliansi ekonomi juga merujuk penelitian ERIA (2023) dan CSIS (2023) menggambarkan dampak penerapan TKDN yang memperburuk iklim investasi, menurunkan produktivitas industri, membebani konsumen dengan harga lebih mahal, menurunkan daya saing industri hingga memicu distorsi.

To note, the Indonesian Economist Alliance said that the rigid TKDN policy had an impact on increasing production costs and had not produced quality products, thus eliminating the competitiveness of Indonesian products in the global market.

The rigid TKDN policy also raises gaps in corruption in licensing and procurement.

The alliance also conveyed the adverse impact of implementing the TKDN policy on the investment climate, product prices at the consumer level, industrial competitiveness, resource allocation, potential violations of WTO rules, Indonesia's international trade, and Indonesia's access to the global market.

The economic alliance also refers to research by ERIA (2023) and CSIS (2023) describing the impact of implementing TKDN which exacerbates the investment climate, reduces industrial productivity, burdens consumers at a higher price, reduces industrial competitiveness to trigger distortion.