Euphoria of Sri Mulyani's Return to Cabinet and Dark Trail of Century Bank

The decision of president jokowi to place sri mulyani as the novel finance minister is indeed giving a positive sentiment to the economy progress. Even the market capital is in euphoria after the release of official reshuffle of which Sri Mulyani was appointed in place of Bambang Brodjonegoro. In addition to external factors, news sentiment whipped into the cabinet also makes its own energy trading floor excited. 

At 9:11, stock index rose by 0.88 percent or 46.44 points at 5270.83 position. A total of 147 stocks traded higher, 30 stocks fell and 78 shares stagnant. The inclusion appointment of Sri Mulyani  was indeed a fresh breeze to economy sector. 

Basically Sri Mulyani  was not new in the national financial sector. Because in 2005-2010, he also chairs the Finance Minister ever tasting in the Era of the government of President Susilo Bambang Yudhoyono.

In 2010 she stepped down from the cabinet and continue her career as Managing Director of the World Bank.

Through her achievement as the managing director of world bank, Sri Mulyani  is expected to topple down the problems within economy especially after the failure to boost the rate to 5% growth last semester. Sri Mulyani  her self is fully experienced figure, in 2005-2010 she was recognized as the best finance minister of south east asia. Even orld Bank President Jim Yong Kim even called Sri Mulyani  able to handle the whole public sector with the World Bank well.

However, the dark trail of Sri Mulyani  also incites negative perception. She was the finance minister when century bank allegedly buffeted by money laundry case of which up to now, the investor insisted to return their money. In term of law, indonesian police had called her to testify regarding her capacity in the allegedly case, but there is still no indication regarding her involvement in the bank conspiracy which ravishing the customers' money. 

Sri Mulyani Returned to Place The Post of Finance Minister

Sri Mulyani after her gait in international bank officer was called by president jokowi to replace bambang brodjonegoro in finance minister post. Jokowi finally decided to replace some of his minister in current reshuffle through work evaluation. Another marine coordinating minister, rizal ramli was also replaced by ex coordinating minister of law and human right, luhut binsar panjaitan. 

Sri Mulyani is known for her competence, her inclusion appointment also signaled good sentiment to the market capital. Composite Stock Price Index (CSPI) soared in early trading this morning's session, on Wednesday (07/27/2016).

In addition to external factors, news sentiment whipped into the cabinet also makes its own energy trading floor excited. 

At 9:11, stock index rose by 0.88 percent or 46.44 points at 5270.83 position. A total of 147 stocks traded higher, 30 stocks fell and 78 shares stagnant.

Stocks that sustain the pace this morning JCI BMRI, BBRI, BBNI, ASII SMGR, LPPF, and ADHI.

All the sectoral indices also green in trading this morning, where the strengthening of the financial sector into a locomotive.

Along with the strengthening of the index, the exchange rate was also higher this morning. According to Bloomberg, the rupiah in the spot market traded at USD 13 138 per US dollar.

The Progress of Tax Amnesty for 2 Weeks: 989 Billion Rupiahs

After almost 2 weeks since Juli 18th  and will end in March, 31th,2016, tax amnesty progress has acquired around Rp 989 Billion. 

At 10 am  this morning, there have been about USD 989 billion in assets that have been declared by 82 affidavit, "said a spokesman for the Ministry of Finance (MoF), Luky Alfirman, at the Ministry of Finance (MoF), Tuesday (07/26/2016).

He explained that the declaration of property situated abroad as much as Rp 252 billion. As for the treasure in the country as much as Rp 735 billion.

The ransom that has reached Rp 23.7 billion. For information, the tax amnesty redemption rates vary according to the category followed by the taxpayer.

For taxpayers who follow a repatriation program or declaration of wealth in the country, the applicable rates are 2% (Period I began July 1 to September 30, 2016), 3% (Period II began October 1 to December 31, 2016), 5% ( period III began January 1 to March 31 2017).

For taxpayers who take the program declaration of assets abroad, the applicable rates are 4% (Period I began July 1 to September 30, 2016), 6% (Period II began October 1 to December 31, 2016), 10% (Period III began January 1 to March 31 2017).

For Taxpayers SMEs Declaration possessions up to Rp 10 billion applicable redemption rate of 0.5%. As for SMEs declaration taxpayer treasure of more than Rp 10 billion, 2% redemption rates apply.

Meanwhile the government targets for 165 trillion rupiahs. Government itself foresees the high expectation on tax amnesty to cover up the deficit of national budget in short term while it will bring promising investment prospective for long term. The government seeks to ensure the tax amnesty ruling out including from any endeavor to fail the program. 

The lately, singapore was recognized by the country as one who attempt to hinder the repatriation of indonesian investor's money there through their policy of 4% compensation to the government. The singapore on the otherhand claimed not to intend to ruin the tax amnesty program.  

State expenditure in the first half is not matched with the revenue in first semester 2016

State expenditure in the first half is not matched with the revenue.

As a result, the deficit widened to Rp 146.4 trillion, from Rp 84.3 trillion in the first semester 2015 to Rp 230.7 trillion in the first-half of 2016.

Finance Minister Bambang PS Brodjonegoro said the budget deficit in the first half of 2016 at the level of 1.83 percent of the Gross Domestic Product (GDP). As for the budget deficit in half-I in 2015 at the level of 0.73 percent of GDP.

The amount of the deficit mainly comes from swelling of total expenditure, consists of a central government, local governments and transfers to the regions. The amount of funds rose to Rp 113.2 trillion in the realization of the same period last year.

On the other hand, actual revenues in the first half of 2016 is lower Rp 33.2 trillion compared to the same period last year reception.

"Actual receipts in the first half of 2016 reached Rp 634.7 trillion (35.5 percent of the revised budget in 2016), whereas in the first half of 2015 reached Rp 667.9 trillion in receipts (37.9 percent of the revised budget 2015)," he said in a meeting the House of Representatives Budget Committee, Jakarta, Wednesday (20/07/2016).

Meanwhile, expenditures in the first half of 2016 reached Rp 865.4 trillion, or 41.5 percent of the 2016 Revised State Budget target Relisasi shopping in semester-I in 2015 only reached Rp 752.2 trillion, or 37.9 persendari 2015. With the revised budget targets so, said Bambang, an increase in expenditures of Rp 113.2 trillion.

"Dana village is a major cause differences in expenditures. Because the village fund the first half of 2016 would be channeled Rp 26.8 trillion, while the same period last year was only disbursed Rp 7.9 trillion," said Bambang.

The government also has realized the budget income of Rp 276.6 trillion, consisting of domestic financing amounted to Rp 300.9 trillion and foreign financing negative Rp 24.3 trillion. So that the final position of Surplus Funding Budget (Silpa) amounting to Rp 45.9 trillion.

Source: kompas.com

IDX Director is Confident Tax Amnesty will Multiply Transaction 200%

IDX Director, Tito Sulistio in hearing assembly with Commission XI of senate presented that Tax Amnesty will stimulate good indication toward capital transaction. The effect of tax amnesty will double transaction around 15 trillion rupiahs per day. This is bigger than current transaction which only reach around 6-7 trillion rupiahs per day. This means the velocity of transaction in IDX is still around 21% smaller than neighbor countries like singapore 40%, thailand 70%. 

Tito said if IDX will reach 60% the transaction will be around 15 trillion rupiahs per day. Tax amnesty will bring big advantage for capital market transaction of the country. 

Last week the stock hit a record high in terms of frequency, beat all the ASEAN countries, "said Tito. There was an increase in transactions to an average of 377,000 per day.

This figure is higher than the average transaction Philippine Stock Exchange that only 56,000 per day, 74,000 per day Singapore and Malaysia 153,000 per day.

"Today (Wednesday) the stock broke the record for market capitalization reached Rp 5.670 trillion. Interestingly, our stock directly beat Malaysia, Thailand, and the Philippines. So it has been felt  the impact of the tax amnesty," said Tito.

Furthermore, he says, BEI continues also to disseminate the tax amnesty program. Tito said, many questions arise during the socialization.

But three questions that are most often found in the grounds of lock-up of three years, a risk if following the tax amnesty program, and the consequences of not following the tax amnesty program

Waiting for Jokowi to Anticipate The Singapore's Cunning Strategy on Tax Amnesty

Tax Amnesty brings a fresh breeze for economy but not for the other neighbor country like singapore. For quite long period that this neighbor country has been the destination of indonesians investors to conceal their money from the monitor of government. Even the corruptors also flee to singapore ever since this country provides legal rule to protect them thus other country can't freely chase out the grafter without the permit of local government of singapore. 

When the third tax amnesty was released by President Jokowi, singapore is definitely in stagger. It is clear that the indonesians investors there who will repatriate their fund to their home country will seriously damage the stability of economy of that country. There are trillion dollars of indonesians money saved there. This means, the country will be in a great chaos of economy crisis if the tax amnesty of jokowi will soon to run. Since the plan of tax amnesty, jokowi has been deterred by many people, and lately singapore released the policy to pay ransom to the government provided the fund will remain in the country. Indonesia foresees this as the conspiracy of singapore to tackle down indonesia tax amnesty. Indonesia through the Mr president jokowi has the big target of tax amnesty realization this year. Recently president ordered to guarantee the confidentiality of documents and list of invetors that are under the scope of tax amnesty. President also offers facility to the investors to allure and ensure for better environment of the investment in their homecountry to target for large amount of money attained from the program. Finance minister, bambang brodjonegoro already released estimated number of investor  in abroad that are around 6000 invetors so far. According to bambang, the potential investment from this abroad investors is 560 trillion rupiahs meanwhile the tax potentiality is around 45.7 trillion rupiahs. However, regarding the tax amnesty, finance minister said that it's difficult to list the investors in the country and he is after serious approach to ensure effectivity of tax amnesty. However, the calculation of mathematics on tax amnesty still have to consider the hindrance factor especially from the countries who are serious to topple down the program. We are to wait the strategy of jokowi to anticipate singapore's policy. Take in to note, singapore is absolutely the main target of indonesians money abroad for long time. Beside providing protecting regulation for repatriated investors, jokowi has to find ultimate long term strategy to assure the investors returning to their home country. The great challenge then is the money that are illegally attained by means of corruption and other crime that have been stored abroad for along period. Singapore must be the main concern of government. It's taking into account that this neighbor country is sincerely on serious strategy to fail the repatriation of indonesian money there. Along the history, it's the third time that tax amnesty being applied. The previous ones during the era of soeharto ever failed  two times. Government has to learn many things to anticipate the barriers. 

Green Low Cost Cars Flood, Indonesian Motorcycle Industry Association Reduce The Target In 2016

Commercial Department of Indonesian Motorcycle Industry Association (AISI), Sigit Kumala stated the plan to reduce the target of motorcycle production this year, lower than the previous period 2015. Sigit said this is the realistic decision looking to the sluggish market  of motorcycle sales compared to the previous period last year. In 2016,AISI is  pressed into the production  as many as 6,250 million units lower than realization of last year which is around 6.708 million units. Initially AISI estimates total distribution this year will stagnate or equal to the achievements of last year. For domestic market, they revised target of 6.5 million units to 6 million units.

The revision is urgently made after the sales performance in the first half / 2016 is bad enough. Distribution of export and domestic markets in the first half / 2016 just as much as 3.11 million units, down 4.8% from the achievements of the first half / 2015 around 3.26 million units.

The option to reduce the production is the ultimate solution looking the fact of first semester sales far below the target around only 5924 unit. This is the most logical mathematics calculation to avoid over production. Indonesian Kawasaki Motor Marketing in chief, Michael Tjandra also has the same perspective. Kawasaki itself experienced the decrease of total sales this year around 2541 units compared to the previous period. Furthermore for retail sales, the company has the total 30% margin of decrease. 

The sluggish market of motorcycle in the country is basically caused by the global economy slowdown. Indonesia also is being influenced especially the commodity price that remain stagnant outside java area. The economy growth of first quarter of the country was also disappointingly far from expectation. It only reached around 4.9% below the ideal standard. The distributes impact on investment and people buying power. 

On the otherhand, the car automotive made a break through to produce massive green low cost cars that pervade into national market. Suzuki, Toyota and Honda have launched LCGC that harassed the motorcycle segment. The easiness provided by these 3 car producers make the customers shift to use accommodated cars. Thus the market segment of motor cycle becomes smaller then previous period. The car industry continues to massively disrupt motorcycle market segment. Lately, toyota is to release the new LCGC calya that is a little bit more expensive than its predecessor agya. 

Some economy analyst consider this as serious threat to motor cycle industry for long period. This can be the initial stultification of motor factories. 

The revision of motorcycle sales target this year is definitely an mathematics most logical option. In the midst of economy slowdown, the automotive industry has to adjust to avoid the loss of over production. Meanwhile another perspective predicts the initial hint of motorcycle industry of the country. 

Critics on Tax Amnesty and The Eager of Companies

Tax Amnesty of Jokowi is absolutely like repulsive policy after the failure of low revenue below the  target in first quarter. On the other hand, the government is on fire to build massive infrastucture program, it needs more fund. 

Jokowi decided to release tax amnesty expecting to earn beyond 100 trillion rupiahs to sustain his program. It is  much evident that he aims to use the money earned from tax amnesty to sustain massive infrastructure that are threatened to  be clogged up due to low revenue. 

However, it exhibits the courage of president to create reformation in term of taxation. Further, government elaboration on the grand scheme of tax amnesty definitely lucrative in long term. Jokowi's intuition goes beyond critics of others that in long term he wants all the indonesian investors abroad to return to the country. It has been so long that indonesians'money abroad has enriched countries like singapore, swiss, etc. 

Tax amnesty also harvests the critics like from former president SBY who considered it as not a prudent choice. SBY proposed on the parsimony of expenditure through cut off unnecessary program of infrastructure. SBY claimed that government has made a mistake pushing massive infrastructure in the midst of economy slowdown. Other activist also protested on tax amnesty claiming that it gives a slit to tax evaders and possibly protecting the money laundry crime. Moreover, tax amnesty is pointed out unjust for marginal class. 

Going in contrary to the perspective of contra which is basically political by nature, the companies precisely eager to welcome the momentum to trawl the tax amnesty fund. For instance PT Waskita Karya (Persero) Tbk (WSKT) plans to issue bonds worth Rp 5 trillion to solicit funds repatriation of the results of the application of the policy tax amnesty or forgiveness Tax Act.
"Our initial target of Rp 5 trillion, the target (bond issuance) this year," said Director of WSKT, M Choliq, Building SOE Ministry in Jakarta, Thursday (07/14/2016).
According Choliq, the inflow of funds repatriation provide numerous benefits for the company. By doing so, it will absorb these funds through a variety of investment instruments.
"The instrument can vary, I can either IPO-kan Waskita Concrete Precast. I can sell shares WTR (PT Waskita Toll Road) and bonds. The total could be Rp 15 trillion to Rp 5 trillion of the instrument, Rp 10 trillion of instruments equity, "he said.
As is known, the government plans to direct funds repatriation tax policy results amensty to finance infrastructure projects. Funds will be directed to enter through the proficiency level of investment instruments bonds or infrastructure bonds.

 

PT PINDAD Gets the 268 million USD from Goverment to Expand the Business

PT. PINDAD, State-owned weapons manufacturer  is aiming for Rp 3.5 trillion (US$268 million) in multi-year contracts from the government as the firm sets its sights on sales of Rp 4 trillion this year.The company foresees better prospective after its reputable performance of technology in international anteriority. The company is behind the achievement of indonesian's forces winning the international shooting championship held in australia for 2  consecutive years. Sophistication of its weapon technology caught the world wide attention after beating the other countries including USA and europeans. The latest news, the weapon of pindad is capable piercing bullet proof vest of USA even the bullet proof tank. 

The company and government looks forward of this as a good opportunity to expand its business of weapon manufacture internationally. President jokowi also supports financially as he aims for better sophisticated alutsista of which pindad gets involved.

The company thanked the government's commitment to increasing Pindad's sales by 30 to 40 percent every year, president director Silmy Karim said on Wednesday. Pindad booked Rp 2.8 trillion in contracts in 2015, up 79 percent from the Rp 1.56 trillion it booked in the previous year.

Pindad recorded a 36 percent increase in sales in 2015 compared to 2014, Silmy said. Furthermore, the firm also booked production increases in weapons, armored vehicles and special ammunition of 133 percent, 86 percent, and 84 percent, respectively, in 2015 compared to the previous year.

"The multi-year contracts will help Pindad to form a longer-term plan, we need to renovate some facilities as well as expand the production line," he told.

Prior to 2015, the weapons producer only booked growth in contract values of a mere 2 percent every year. 

"We’re aiming for Rp 5 trillion sales at the end of President Joko ‘Jokowi’ Widodo's term. Compared to the big Asian players like South Korea, China, India and Singapore we are still small, but we are moving forward," he said.

Pindad's current sales mostly come from domestic needs with only 10 percent of its product exported overseas such as to Laos, Thailand, the Philippines, Egypt and Nigeria. The company recently produced a non-military product, an excavator, which has booked 11,000 orders from the government for its extensive infrastructure projects, Silmy claimed, adding that there was no plan yet to sell the product to private companies

Tax Amnesty is Being Deterred for 21 Reasons

Tax Amnesty as the ultimate resolution of jokowi to boost economy growth is being deterred. Serikat Perjuangan Indonesia (SPRI) evaluated the tax amnesty on ruling considering the violations of 21  reasons. SPRI said that tax amnesty by essence has been unjust especially to marginal class. It is only intended to advantage the tax evaders and money laundry scheme. 

Tax amnesty has been initiated by Jokowi to withdraw back the indonesian investors who placing their money overseas. Tax amnesty is expected then by the government to repatriate numerous investors capital abroad and hastening thus the country's economy program. This was claimed to be the alternate choice after government failed to increase the revenue due to deficit of tax income and other sectors. Meanwhile the rate of economy growth that was far from satisfaction 4.92 % became boomerang for the government who is assumed not to have a good speculative on revenue. On the other hand, the massive infrastructure is being tampered by deficit of budget. 

SPRI stands on the blame for this government resolution on tax amnesty as the red carpet for the tax evaders and money laundry perpetrator. Thus it is not an ultimate resolution. Months ago, the ex president SBY also considered tax amnesty not a prudent choice. SBY proposed on efficient of budget through cut off of unnecessary program that are basically not in urgency. 

However, center of taxation analysis ( CITA) yustinus prastowo, the claim toward tax amnesty is due to lack of socialization. He added most of people do not cognize the technic, system and taxation practice itself. Tax evaders according to yustinus is only a mere assumption. Thus government has to clarify the tax amnesty by gathering all related figures like employees, institutions and other people about the essence of the program. Yustinus said that tax amnesty basically will enlarge the tax subject for so far tax subject are only the similar and limited people. Through this, the burden of tax will be lessen.

Lebaran Influences No significant to Second Quarter of Economy Growth

Lebaran influences no significant impact toward the macro economy growth said Darmin nasution, coordinating minister of economy. Though the high expenditures compared to the ordinary days. In addition, darmin said that the impact of lebaran expenditure will only be perceived in the third quarter. This is because the high rate of expenditure of lebaran took place since july. However, darmin affirmed optimism of higher growth in the second quarter than the first quarter which is 4.92 percent. 

Meanwhile bambang brodjonegoro, economy and finance minister assures the higher growth in the second quarter around 5%, 0.8% better than the previous period. This is because of the parameter of government policies like infrastructure and deregulations to boost the haste of economy growth. The previous months government through home affair ministry decide to cut off thousands of local regulations that stay as obstacles for investment. 

On the contrary, BI governor, is quite hesitant that the second quarter growth will touch the level of 5%. The  main obstacle is the weakening of export rate caused by global economy situation. China for example which is the one of main export destination  of the country under the prevailing crisis forcing that country to reduce the import quota. 

Nevertheless, BI governor also believed the higher prospective growth of economy this second quarter affected by the high expenditure and the 13th salary for government employees. But this will be more evident in the third quarter rather than the second quarter.

Jakarta Urges to forbid The New Comers After Lebaran

There is grotesque scene during lebaran in metropolitan city Jakarta. The city apparently is quiet unlike those ordinaries where we encounter the flux of mass. There is no such heavy traffic, the cars are rarely seen. This is because almost 90% of its population returning to their hometown, villages to celebrate Ramadhan with their families. 

The fact that most of population of Jakarta comes from immigrants of Java and its western part.

However this serenity will last only during lebaran, the people will return to the city and inevitably raising more the population than before. This is because there are around 50.000 new comers brought by their relatives or families after that long week vacation. This will make the city more crowded and definitely lies as the great anxiety of the local government jakarta. 

Alluding to this, the vice governor, Jarot urges the people not to bring their families upon returning after long vacation. The vice governor said that this will make the city and increase the criminals and homeless rate. However Jarot clarified that the city is open for all and not to mean for discrimination to the new comers. What he points out that the new comers that are brought with should be equipped with skills, education standards thus they won't be the problem for the city. Jarot urges the new comers to register in local chiefs after 6 months staying in the city. 

Jakarta is absolutely the dream for indonesians. It's just infallibly true that new comers aim to stay here. This becomes the problem for the metro city especially those incompetent new comers. Competing for work which requires high standard of skills and educations will inflict a social disease of which the loser will turn to be criminals after having no option to survive in the city. This will be a difficult assignment for the government since there is no regulation to prohibit the coming of new comers to the study especially those unskillful.