Govt Issues New Regulation on Export Revenue
President Joko Jokowi Widodo on 10 January 2019 signed Government Regulation Number 1 of 2019 on Export Revenue from Natural Resources Business Activities. The Regulation aims to bring export revenue from natural resources business activities into Indonesian financial system in order to maintain sustainable development and safeguard national economy.
The Regulation stipulates that export revenue from natural resources (DHE SDA) must be included in Indonesian financial system.
“The aforementioned DHE SDA comes from the following exported goods: a. mining; b. plantation; c. forestry; and d. fisheries,” Article 3 paragraph (2) of the Regulation reads.
The exporters obligation to bring the DHE SDA into Indonesian financial system is carried out by placing the DHE SDA into special DHE SDA account at foreign exchange bank no later than the end of the third month after registration of export customs notification.
“Provisions regarding the inclusion of DHA SDA into Indonesian financial system are conducted based on Bank Indonesia Regulations,” Article 4 paragraph (3) of the Regulation reads.
The Regulation also stipulates that term deposit interest from special DHE SDA account is subject to income tax in accordance with the provisions of law on taxation.
The aforementioned special account is used by the exporter to pay: a. export duty and other export-related levies; b. loan; c. import; d. profit/dividend; and/or e. other requirements for investment as stipulated in Article 8 of Law Number 25 of 2007 on Investment.
The use of DHE SDA, according to the Regulation, should be supported by appropriate documents while loan must be made in the loan agreement.
“In the event that payment is made through an escrow account, the exporter shall open escrow account in foreign exchange bank,” Article 7 of the Regulation reads.
The Government Regulation also stipulates that in the event that the escrow account has been made in overseas bank before the enactment of the Regulation, the exporter shall transfer the escrow account to foreign exchange bank no later than 90 (ninety) days after the Regulation is promulgated.
“The supervision of the implementation of the export activities is conducted by Ministry of Finance in accordance with the provisions of the prevailing laws and regulations,” Article 8 paragraph (1) of the Regulation reads.
The Regulation also states that the supervision of the implementation of the obligation for inclusion of DHE SDA into Indonesian financial system and the use of DHE SDA is conducted by Bank Indonesia, while the escrow account supervision at foreign exchange bank is conducted by the Financial Services Authority (OJK).
“In the event that the exporters do not obey the regulation on DHE SDA inclusion into Indonesian financial system, misuse the DHE SDA and/or do not make escrow accounts at foreign exchange bank or do not transfer foreign escrow to foreign exchange bank, the exporters are subject to following administrative sanctions: a. administrative fines; b. export restriction; and/or c. revocation of business licenses,” article 9 paragraph (1) of the Regulation reads.
The implementing regulation of this Government Regulation should be issued no later than 7 (seven) days after the promulgation of the Government Regulation.
The Government Regulation was promulgated by Minister of Law and Human Rights Yasonna H. Laoly on 10 January 2019 and shall apply as of the date of its enactment,” article 12 of the Government Regulation reads. (Pusdatin/ES)
Translated by: Ridwan Ibadurrohman
Edited by: Yuyu Mulyani