Member Article

Following the discourse of the upcoming omnibus law, the government recently announced that it will submit omnibus draft bills on job creation (“Omnibus Law on Job Creation”) and taxation (“Omnibus Law on Taxation”) to the House of Representatives soon.

Omnibus law has become an emerging issue ever since it was mentioned during the President’s inauguration speech on 20 October 2019. The government claims that the omnibus laws are aimed to strengthen the national economy through the improvement of Indonesia's investment climate and competitiveness.

It is expected that the implementation of omnibus law may gain at least 3 (three) benefits:

1. it eliminates overlaps between laws and regulations;
2. the efficiency of the process of change/revocation of laws and regulations is improved; and
3. it eliminates sectoral egos contained in various laws and regulation.

In general, omnibus law is a method or concept of making rules that combines several rules with different regulatory substance, into a single regulation that serves as a kind of umbrella act. Several countries such as the United states, Australia and Vietnam have implemented Omnibus Law and Indonesia has in fact implemented Omnibus Law through Law No. 9 of 2017 on the Determination of Governmental Regulation in Lieu of Law No. 1 of 2017 on Information Access for Taxation Purposes. This law eliminates and revokes provisions on banking, insurance and capital market confidentiality related to taxation access which was previously governed under Banking Law, Sharia Banking Law, Insurance Law and Commodity Futures Trading Law.

Written byVincent Ariesta Lie,Hilda Leswara, and Nadira.

Read about the benefits that may be gained from its implementation by clicking this link.