It has been nearly three months that President Joko “Jokowi” Widodo had announced that the COVID-19 pandemic has affected Indonesia. Ever since, the nation has seen numerous government efforts to mitigate the spread of the virus, from announcing its own brand of jurisdictional semi-lockdowns, dubbed as PSBB (Pembatasan Sosial Berskala Besar or Large-Scale Social Restriction), to introducing various economic stimulus programs to help secure the country’s financial system stability and to ensure a speedy economic recovery. Now, as efforts to find a vaccine to COVID-19 continue to trail, President Jokowi has deemed that “Indonesia should try and co-exist with COVID-19". Over the last couple of weeks, the government has moved towards easing some of those restrictions to allow social and economic activities to resume. Under the oft-repeated phrase “New Normal”, the government has issued a series of policies that would allow factories, offices, shopping centers as well as houses of worship to re-open, if they are located in areas where COVID-19 infections and fatalities are on decline. However, these social, economic and religious activity hubs must still implement a strict health and hygiene protocol. “Co-existing is not giving up. It’s adapting. We fight COVID-19 by prioritizing strict health protocols that we all must oblige to. The government will arrange it so that our lives can gradually return to normal while at the same time observes and considers the facts that are happening in the field. I stress that the safety of our citizens remains our priority. This is not a question of one or the other. This isn’t a dilemma. Our lives will change thanks to this pandemic. That is a certainty. That is what we call the new normal,” said President Jokowi in a May 15 televised interview about the new normal campaign. Strict health protocols The first in the series of regulations issued concerning the new normal was released by the Health Ministry on May 26. Minister of Health Decree No HK.01.07/Menkes/328/2020 lays out guidelines for companies to follow in the effort to prevent any further spread of COVID-19 in sectors of the economy that would reopen in areas where the PSBB status has been lifted. On that same date, the Health Ministry also issued Circular No. HK.02.01/Menkes/335/2020 on Protocols to Prevent the Spread of COVID-19 in the Workplace for the Services and Trade Sector (Public Areas), which lays out the various obligations workers and employers must fulfill while continuing their businesses in areas during and after the PSBB status has been lifted. Then, on May 29, the Ministry of Domestic Affairs issued Decree No. 440-830/2020 on Guidelines for the Arrangements of a Safe and Productive COVID-19 New Normal for Civil Servants. The decree lays out the various requirements and steps government officials must take before reducing the various social and economic activity restrictions that have been put in place since Indonesia started its PSBB program in the effort to mitigate COVID-19. These requirements include a continuous declining rate of infections and deaths in the last 14 days. The decree also lays out the protocols that should be put in place once social and economic activity restrictions have been lifted. Going further into details, Indonesia has adopted a zone approach to implement the new normal policy using these indicators: Infections in the last 14 days Number of Suspected Cases in the last 14 days Number of funerals using COVID-19 protocols Direct COVID-19 infections on health workers If the area shows a declining curve in all four indicators, it is designated a “Green Zone”. If the area shows a flat curve in all four indicators, it is a designated a “Yellow Zone”. If the area shows a rising curve in all four indicators, it is designated a “Red Zone”. As of the end of May, the government has allowed 102 regions to implement the new normal protocols. Should other regions enter the “green zone”, as stipulated by the Minister of Domestic Affairs Decree No. 440-800/2020, these regions would follow suit. But as it is the case already in countries such as China, South Korea and Japan, the campaign risks an increase in infection and death rate following the relaxation of social and economic activity restrictions. There is no telling what shape the economy will take from this “New Normal” practice. Research done by The Economist shows that even during this post-lockdown economy, businesses and individuals would still be struggling to make ends meet. Data compiled by The Economist showed that, at least in China, consumer footfall fell to about half of its previous levels from early in the year, hotel occupancy was also down by around fifty percent, while 75 percent fewer people are flying.
In implementing the provisions regarding Corporate Income Tax reduction, as regulated in Government Regulation in Lieu of Law Number 1 of 2020 on State Financial Policy and Financial System Stability for Mitigation of the COVID-19 Pandemic (“Perppu 1/2020”), on April 21, the Directorate General of Tax issued Regulation of the Director-General of Tax Number PER-08/PJ/2020 of 2020 on the Calculation of Income Tax Installments for the Current Tax Year in Relation to the Adjustment of Income Tax Tariff for Corporate Taxpayers (“DGT Regulation 08/2020”). Under DGT Regulation 08/2020, the calculation of the amount of Article 25 PPh Installment for each month, due to the adjustment of income tax tariff for corporate taxpayers, applies to: General Taxpayers; and Taxpayers with Periodic Financial Statement Obligations, including: Banks; State-Owned Enterprises; Regionally-Owned Enterprises; publicly listed Taxpayers; and other Taxpayers that are required to make periodic financial statements based on the provisions of laws and regulations. The adjustment of income tax tariff, which is implemented over taxable income for domestic Corporate Taxpayers and permanent establishments, shall become: 22% (twenty-two percent), which applies to the 2020 Tax Year and 2021 Tax Year; and 20% (twenty percent), which starts to apply to the 2022 Tax Year. Furthermore, Domestic Taxpayers can obtain a reduction of Income Tax tariff amounting to 3% (three percent) lower than the Income Tax tariff, if they meet the criteria below: Domestic Taxpayers are in the form of Publicly-Traded Company (Perseroan Terbuka); Domestic Taxpayers have a total number of shares which are traded in a stock exchange in Indonesia of at least 40% (forty percent); and Domestic Taxpayers meet certain requirements. Therefore, the Income Tax tariff for said Domestic Taxpayers shall become: 19% (nineteen percent), that applies in the 2020 Tax Year and 2021 Tax Year; and 17% (seventeen percent), that starts to apply to the 2022 Tax Year. The implementing regulation above shall provide additional clarity for all relevant parties looking to take advantage of the policy.
On April 17, 2020, the Ministry of Agrarian Affairs and Spatial Planning/the National Land Agency issued Circular of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency No. 7/SE-100.HR.01/IV/2020 on the Relaxation of Services for the Determination and Registration of Land Rights during the COVID-19 Emergency (“Circular 7/2020”). With the issuance of this circular, the validity periods for the following rights which have already expired or will expire during the COVID-19 period, which began on March 31, 2020, have now been extended to December 31, 2020: Right-to-Cultivate (Hak Guna Usaha - “HGU”); Right-to-Build (Hak Guna Bangunan - “HGB”); and Right-to-Use (Hak Pakai - “HP”). It should be noted that if a rights holder does not submit a rights extension application by December 31, 2020, then said rights will be deemed to have expired. Furthermore, the validity periods to the registration of decision letters for the granting, extension or renewal of land rights that have expired or will expire during the COVID-19 period have also now been extended until December 31, 2020. If the relevant rights receiver has not registered their decision letter, extension or renewal of land rights by December 31, 2020, then said decision letter will be deemed null and void. In the meantime, services related to registering decision letters on the granting of land rights or transferring of land rights affected by the obligation to pay Acquisition of Land-and-Building-Rights Duty Fees (Bea Perolehan Hak atas Tanah dan Bangunan – “BPHTB”) and/or Income Tax can still be carried out until December 31, 2020.
In order to increase preparedness and to prevent the emergence of new cases of COVID-19, the Governor of the Province of DKI Jakarta, Mr. Anies Baswedan, issued Regulation of the Governor of the Province of DKI Jakarta Number 47 of 2020 on Travel Restrictions for Leaving and/or Entering DKI Jakarta in the effort to prevent the spread of COVID-19 (“Pergub DKI Jakarta 47/2020”). This regulation came into force on May 14, 2020, and carries the following provisions: Travel Prohibition Provisions Based on Pergub DKI Jakarta 47/2020, every person or business actor is prohibited from traveling out of and/or enter the area of DKI Jakarta Province during the period of Large-Scale Social Restrictions (Pembatasan Sosial Berskala Besar – “PSBB”). If there are people or business actors who violate these rules, then they will be subject to the following actions: If they are domiciled in the Province of DKI Jakarta, they will be directed to return to their homes If they are domiciled from outside the Province of DKI Jakarta, they will be directed to return to their place of origin or be quarantined for 14 days at the place designated by the relevant authorities. Exempted Parties However, exceptions are granted to the following parties: Leaders of high state institutions. Corps of representatives of foreign countries and/or international organizations in accordance with international law. Members of the Indonesian National Army and the Indonesian National Police. Toll road officers. Officers handling the prevention of the spread of COVID-19, including medical personnel. Firefighters, ambulances and hearses. Drivers of freight cars with no passengers. Drivers of vehicles carrying drugs and medical devices. Patients who need emergency health services and their companions. Every person, business actors, or foreigners who, because of their duties and work, have an Entry and Exit Permit (Surat Izin Keluar/Masuk – “SIKM”). Eligible Parties to Obtain a SIKM The SIKM may be granted to the following category of person, business actors, or foreigners: All government agencies, both national and regional. Representative Offices of Foreign Countries and/or International Organizations. State or Regional-Owned Enterprises that participate in handling COVID-19 and/or their business activities to fulfill the basic needs of the community. Business actors engaged in these sectors: Health Food and beverage Energy Communication and information technology Finance Logistics Hospitality Construction Strategic industries Basic services, public utilities and industry determined as national vital objects and certain objects Local and international community organizations engaged in the disaster and/or social sector. Procedure and Requirements for SIKM Application Every person, business actors, or foreigners who meet the category as mentioned above may submit an SIKM application online through the website: corona.jakarta.go.id by attaching the following requirements: Recommendation Letter from Neighborhood and Community Association (“RT/RW”) Statement of Health. Letter of Statement stating that the person is working in the Jakarta area (repeated SIKM). Letter of Business Trip from the office. Color photographs. KTP/ID that has been scanned. It should be noted that falsification of letters or manipulation of Electronic Information and/or Electronic Documents may be subject to: Article 263 of the Indonesia Criminal Code with a maximum penalty of 6 years in prison Article 35 and Article 51 paragraph (1) of ITE Law No. 11 of 2008 with a maximum penalty of 12 years of in prison Types of SIKM To facilitate the travel of those that are eligible, the Jakarta administration offers the following SIKM: Repeated trips, intended for: Employees, business actors, or foreigners domiciled in the Province of DKI Jakarta, but the workplace or business place is outside the area of Jakarta-Bogor-Depok-Tangerang-Bekasi (“Jabodetabek”); or Employees, business actors, or foreigners domiciled outside Jabodetabek, but the workplace or business place is in the area of the Province of DKI Jakarta. One-time trip, intended for: Employees, business actors, or foreigners on a business trip to outside the area of Jabodetabek; or A person or business actor domiciled outside of Jabodetabek, but has: Residence or business place in the area of DKI Jakarta Province. Urgent needs that include travel for patients who need emergency health services or travel for people whose main family members are seriously ill or have died.