Sri Mulyani: The Job Creation Law Helps Indonesia Get Out Of Middle-Income Countries

Minister of Finance, Sri Mulyani. (Photo: Instagram @smindrawati)

JAKARTA - The Minister of Finance, Sri Mulyani Indrawati , said that the Omnibus Law on Job Creation is very important for Indonesia, especially to get out of a middle-income country. Therefore, said Sri Mulyani. several breakthroughs are needed, one of which is the Omnibus Law on Job Creation.

"Omnibus Law aims to improve and remove Indonesia from the middle income trap ," at the Opening of the Financial Professional Expo, Monday, October 12.

The state treasurer said that efficiency and easy regulation would provide opportunities for all people to do business. Through the Job Creation Law, Indonesia has also pushed for tax reform by providing various kinds of incentives through the Job Creation Law.

Sri Mulyani said that the tax reform contained in the Job Creation Law could enable business actors to increase productivity, innovation, and creativity, which could propel Indonesia away from the trap of a middle-class state.

One of the tax policies regulated in this broomstick law is the exemption of income tax (PPh) on foreign dividends from domestic taxpayers, as long as they are invested in Indonesia. The government believes this can be used as capital to attract investment into the country.

"If we talk about the middle income trap , that's where it lies," he said.

As is well known, the Indonesian House of Representatives (DPR) passed the Job Creation Bill into a Law (UU). The agreement was reached at the level II plenary session of the decision making on the Bill on Job Creation at the DPR RI Building, Jakarta, Monday, October 5.

Previously, the Coordinating Minister for the Economy Airlangga Hartarto emphasized that the Job Creation Law aims to increase employment. That way, existing human resources (HR) can be utilized.

Airlangga said that Indonesia was gifted with a demographic bonus. An abundant workforce needs to be balanced with adequate employment opportunities. This is so that Indonesia will not be trapped as one of the middle income countries or middle income countries that find it difficult to become a developed country.

"We know that Indonesia has a target of escaping the middle income trap with a demographic bonus so that this golden moment we don't put aside, because this is Indonesia's momentum because we are part of the upper middle income. The challenge is to create job opportunities for working angktan," he said, in Jakarta, Wednesday, October 7. .

Airlangga said the Job Creation Law could improve the climate of ease of doing business. One of them is cutting convoluted business regulations and licensing, especially between the central government and the regions. This issue is considered to be hampering the investment process.

"So the Job Creation Law aims to synchronize and cut regulations and rules and regulatory obesity that hinder Job Creation," he explained.