TO REFRAIN FROM USING SUBSIDIZED OIL IN THE SPIRIT OF OIL FASTING

To extend subsidy was like throwing salt to sea, no matter how much salt was thrown, it would not make the sea any saltier. This was disclosed by the Deputy Minister of Energy and Mineral Resources Susilo Siswoutomo in illustrating subsidy for energy.

“To refrain from using subsidized oil like fasting is the way we try to stop subsidizing Rp. 1 trillion per day. Subsidizing oil is a wasteful effort, it is completely useless.” Deputy Minister Susilo Suwitmo was quoted as saying.

Subsidy for oil was given by the Government to enlighten people’s burden in buying energy, but ironically the subsidy went off target and often abused by some people”

“In his book entitled Subsidized Oil Fasting Susilo said that the National Movement of Fasting was necessary to be exercised, for example 2 days in a week – let’s say on weekend consumers of subsidized oil fast not to buy subsidized oil. A movement as such would save Rp96 trillion in just 2 days or Rp. 8 trillion in a month or Rp. 96 trillion in a year.

The Rp. 96 trillion fund could be used for building infra structure in the regions or for building Jakarta-Surabaya double railway track which needed fund of Rp. 9.9 trillion just by “fasting” for 10 days.

Furthermore Susilo said that “fasting” would accelerate economic growth which would build national so Indonesia could keep up with the progress attained by successful countries: Brazil, Russia, India, and China combined in BRIC.

Oil “fasting” was more than just building castles in the air because it was easily understood. Susilo concluded. (SS)

Business News - October 17, 2014

TO BREED AN ENERGY CONSCIOUS YOUNG GENERATION

Deputy Minister of Energy and Mineral Resources [ESDM] Susilo Siswoutomo on Saturday [11/10] attended the Energy Conscious Night on the occasion of launching of the book entitled Subsidized Oil Fasting written by Susilo Siswoutomo at the Ministrial Office.

This Energy Conscious Night was the highlight of a chain of events of the Energy Conscious Festival run in 4 cities through 2014 i.e. Yogyakarta [Universitas Pembangunan Nasional, May 30]; Makassar [Universitas Hassanuddin, June 9] and Manado [Sam Ratulangi University, August 20].

Head of Public Communication of the Ministry of ESDM Saleh Abdurrahman disclosed that some Indonesian people still believed that Indonesia is a country rich in natural resources which was wrong because in fact Indonesia’s crude oil resources was running out due to low domestic production.

“The Energy Conscious Festival was an approach expected to communicate national energy problem to the public, and how to manage energy better; among others through film [short film] making contest.” Saleh disclosed.

Saleh expected that through this event, the public, particularly the young generation understood the condition of national energy and realize that energy resources would run out unless wisely consumed. The public must also begin to usw substitute energy like gas and vegetable fuel.

“The participants and winner of Energy conscious Festival were expected to be the Ambassadors of Energy Conscious who would campaign the energy conscious concept especially the young generation,” Saleh said. (SS)

Business News - October 17, 2014

TAX OFFICIALS COORDINATE WITH LAW-AND –HUMAN-RIGHTS COMMISSIONERS

To prevent unregistered Taxpayers Number, the Director General of Tax, Ministry of Finance was engaged in collaboration with the Dir Gen Administration of Common Law [AHU], Ministry of Law and Human Rights to examine Taxpayers Number [NPWP] of companies. “Together we are making re-registration and validation of all data. There would be no unregistered NPWP.”

Collaboration between the Tax Dept and AHU integrate data of foundations, organizations, companies which were unregistered and Invalid. All data would be based on on-line system.

Fuad stated that the process of validation might take a long time until there was certain data of taxpayers. “We might need a few years. We will check them all” Fu ad Said.

If during checking up an unregistered NPWP was detected, there would be sanction, starting from the lightest like notification and the most severe: cancellation of business permit. “If the taxpayer turned stubborn, we will cancel their business permit.” Fu ad Said.

The process of NPWP screening begins with signing of collaboration agreement with the Dir Gen AHU of the Ministry of Law and Human Rights. The first step would by data synchronization by on line. According to Fuad the plan had been planned long ago but only now being realized due to many considerations.

In this regards, the Dir. Gen. of Taxation had asked AHU to synchronize data of taxpayers and their obedient level. It was known that tax subjects, personal or institutional, were not obedient in fulfilling their duties to pay tax. Admittedly the data owned by the institutions were far from perfect and such was the reason tax target was missed.

So far income from tax came to Rp. 1,000 trillion. To combine with cigarette tax the total was Rp. 1,200 trillion. Of 28 million tax subjects, only 10 million had fulfilled their obligation. The number personal tax subjects were even more astronomic, nearly 40 million detected. Of 60 million potential personal tax subjects, only around 23 million fulfilled their duties.

Meanwhile the Dir Gen of AHU Ministry of Justice and Human Rights Hakistuti Harkisnowo stated that the joint agreement with the Dir Gen of Taxation would never stop fraudulence in the taxation sector. For that matter he would strengthen defenses on the IT side to protect data from hackers. “I hope it is a beginning to improve service to the public and minimize fraudulence among tax avoiders. It is not an easy task, I am really dipendening on our IT expert friends” Harkristuti said. (SS)

Business News - October 17, 2014

LOW SUPPLY OF OFFICE SPACE ACCOUNTS FOR SLOWDOWN IN THE BUSINESS LINE

The office space sector in Semester I-104 was posting slowdown with decreased absorption up to 50% in the first 9 month of 2014 against same period last year. Such was outcome of Cushman & Wakefield research presented by Head of Research & Advisory Arief Raharjo in Jakarta on Tuesday [14/10].

Arif stated that due to lack of new supply and availability of room in existing buildings, actives of rental transaction through Q III-2014 was more by tenants who extended contract or space expansion.

Demand for office space itself was still high including relatively small space around 100m to 300m. Two medium sized transactions took place through this quarter by security and trading companies respectively using space. 1,100 m2 up to 300 m2 at BEI and Mid Plaza.

Through this quarter absorption was higher at 9.600 m2 to come to accumulative demand at 4.40% [up by 1.6% y o y] and occupation level by end of Q III 2014 was 94.0% [-0.4% Q o Q].

Grade A and Grade B office building posted positive absorption, 5,500 m2 and 5,300 m2 respectively while Grade-C posted negative absorption [1,200 m2] as tenants moved to grade-B office buildings.

Base rent plus service charge of grade A office building was still stable through Q III, but in case of Grade B and Grade C rental fare was still increasing, especially of building with high occupancy with high rental tariff for tenants extending rent or new tenants. By end of September 2014 average gross rental in Rupiah increased by 2,2% to become Rp. 328,000 per m2 per month; while in USD it was down by 2.0% to become USD 27.39 per m2 per month.

Slowdown in selling price increase of stratatitle office space was still continuing through this quarter. Selling price of strata title office space was still at Rp. 46.5 million per m2.

As supply would be in by Q IV 2014, occupancy level might post downturn till end of 2014. Absorption level might would increase significantly after space occupancy of new office spaces by “pre-committed” tenants in the newly completed buildings. Meanwhile average rental price seemed not to change till end of 2014 because through the first 9 months of 2014 building owners had increased their rent. (SS)

Business News - October 17, 2014

TO BUILD PUBLIC AWARENESS ON THE IMPORTANCE OF INSURANCE

A special strategy was needed to build awareness on the importance of insurance to the Indonesian people due to low penetration of insurance in Indonesia. Chairman of the Indonesia Insurance Council [DAI] Hendrisman Rahim disclosed on Monday [13/10] in his press conference in connection with the 98^th Insurance Day 2014 on Saturday [18/10].

People’s awareness of insurance products must be enhanced time after time. This was because survey outcome by National Financial Survey run by OJK in 2013 showed that only 17.84% or only 18 out of 100 people were well literate about insurance and only around 12 out of 100 Indonesian citizens [11.8%] used insurance services.

Hendrisman stated that low penetration of insurance in Indonesia indicated that there were still many Indonesians who had not understood insurance for life and how to manage their money well. “This is regretful considering Indonesia’s huge population,” he said.

Indonesia’s 240 million population was a potential market to the insurance industry especially with the sizable growth of middle class population at 8% per year. Today Indonesia’s middle class population was posted at 50 million people and would reach its peak in the next 25 years. The high market potential was visible in the numerous foreign investors of foreign insurance companies entering Indonesia lately.

Meanwhile contribution of the insurance sector to GDP was posted to increase. This was indicated in increased GDP ratio from 1.82% in 2008 to become 2.16% in 2012. With proclamation of Insurance Day, people’s awareness could be increased each year. (SS)

Business News - October 17, 2014