Under-Invoicing to Transfer Pricing Discussed by DPD, Considered to Weaken Indonesia's Competitiveness

Chairman of the DPD RI Sultan B Najamuddin. (Photo: Presidential Media Staff)

JAKARTA - The Chairman of the Indonesian DPD, Sultan Bachtiar Najamudin, highlighted import dependence, under-invoicing practices, transfer pricing, and inefficiency as issues that undermine Indonesia's economic competitiveness.

The Sultan called the problem a "thorn" that must be removed through economic transformation, even though his policies are not always comfortable.

"The economic transformation carried out by President Prabowo is like pulling out a thorn in the flesh. Pulling out a thorn is certainly uncomfortable, there is a sense of pain, even a little bleeding," said the Sultan in the Annual Meeting of the MPR and Joint Meeting of the DPR and DPD at the Parliament Complex, Senayan, Jakarta, Friday, August 14.

He then explained what the "thorn" meant.

"The thorns are dependence on imports, low added value of natural resources, under-invoicing practices, transfer pricing, inefficiency, and various obstacles that erode national competitiveness," he said.

Under-invoicing is a practice of listing the value of a transaction lower than the actual value. Meanwhile, transfer pricing is related to the determination of the price of transactions between companies that are still within one business group.

According to the Sultan, economic transformation requires difficult decisions to strengthen the foundation of the national economy.

DPD considers the Danantara policy, one-door exports, food and energy self-sufficiency, Red and White Village and Village Cooperatives, to Red and White Fishermen's Village as a series of interrelated policies.

The Sultan also assessed that downstreaming is one of the keys to increasing the added value of natural resources in the country.