Government to Roll out Eight New Structural Reform Policies

Jakarta (Antara) - The government will issue eight new policies to settle structural problems that have come in the way of reducing the current account deficit, Chief Economic Minister Sofyan Djalil stated here on Friday. \"The policies are issued in the framework of further structural reform efforts in our economy. These structural reforms will help to make our economy more competitive and efficient,\" he noted before leading a coordination meeting to discuss the developments related to the rupiah exchange rate and current account deficit. The meeting was attended by Coordinating Minister for Maritime Affairs Indroyono Susilo, Minister of Finance Bambang Brodjonegoro, and Bank Indonesia Governor Agus Martowardojo. Sofyan stated that the policies were answers to the negative response from financial market players with regard to the external pressure that has led the rupiah exchange rate to depreciate up to Rp13.2 thousand against the US dollar. \"These policies have actually been planned since long, but they have just been worked out and will be made public today. This will address the concern of some market players,\" he revealed. He stated that the government will issue an economic policy to improve the performance of balance of trade in the service sector, which has, so far, been the biggest contributor to the deficit. The widening current account deficit is an internal problem that the government needs to tackle as it has a negative impact on the rupiah. This will help to maintain the country\'s economic fundamentals and also assist in reducing vulnerability against global economic pressures. The eight policies to be issued by the government include a finance ministerial regulation that regulates the flexibility of Provisional Anti-Dumping Tax and Provisional Security Import Tax to boost competitiveness of domestic products. Others include revision of Government\'s Regulation Number 52 of 2011 on tax allowance and tax holiday initiative to boost direct foreign and domestic investment. \"We will offer more flexibility to the Investment Coordinating Board (BKPM) to give judgments on tax allowances. We will provide norms to facilitate quick decision-making processes,\" he affirmed. He noted that the government will also issue a policy to boost the use of biofuel to higher than the current set norm of 10 percent and will also prepare a value-added tax scheme for domestic shipping industries to improve their competitiveness. Sofyan emphasized that the government will also encourage the state-owned reassurance company to reduce the deficit in its balance sheet, especially in the insurance sector, and to increase law enforcement to support the implementation of the Law on Money that requires the use of rupiah currency at home. Meanwhile, the last policy will support the obligation to use L/C for transactions on four main commodities and improve the remittance system to ease flows of income from Indonesians working abroad into the national banking system, he stated. (*)