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Dissecting Halal and Tax Provisions in Omnibus Law
December 18, 2020 | by AmCham Webmaster

AmCham Indonesia held a virtual webinar in collaboration with SSEK Indonesian Legal Consultants on the Omnibus Job Creation Law on Dec 17, specifically on the Halal Law and taxation provisions. The meeting was moderated by AmCham Indonesia’s Government Relations Director Gusti Kahari, who facilitated the discussions for AmCham members and key industry stakeholders. 

Ira Eddymurthy, founding partner of SSEK, and Syarifah Reihana Fakhry (Reina), SSEK associate, spoke first on the Halal Law. Reina gave a brief background of the Law, its basic provisions, the implementation timeline for different products, and the certification process. Ira continued the presentation, explaining the major changes made in the Omnibus Law, which cover the certification process, facilitation for micro and small businesses, Halal Inspection Agencies (LPH), sanctions, and the implementing regulations.

One key change in the LPH sphere is that private universities under the auspices of a recognized Islamic institution can propose the establishment of an LPH. Ira also said that micro and small businesses are exempted from halal certification fees, and some unanswered questions in the provisions of the Omnibus Law on Halal will be answered in the implementing regulations.

Moving on to tax, Rusmaini Lenggogeni, supervising partner of SSEK, and Asri Rahimi, an SSEK associate, spoke on the changes in income tax and VAT laws and the general provisions and procedures of the taxation law. Rusmaini began the presentation by highlighting changes to Article 2 on tax subjects. She also discussed Article 4, which provides exemptions for income received by expatriates. Rusmaini also outlined changes to the VAT law, specifically Article 1A, 4A, 9, and 13, and there was extensive discussion on VAT credit relaxation.

Asri then spoke on amendments to the general provisions and procedures of taxation law, specifically noting articles that have been amended, removed, and added. She said the main changes related to the sanction rate and the compensation rate, both of which are yet to be determined by the Minister of Finance. 

The webinar concluded with a Q&A session that mostly covered halal, including regulations on confidentiality obligations of organizations appointed as LPH, packaging/labeling regulations, sanctions, and cooperation between foreign halal certifiers and Indonesia. One question on the taxation side touched on flat-rate administrative sanctions for tax revenue violations. The speakers answered numerous questions and provided valuable insights for the participants.

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