A House special committee was established Tuesday tasked with deliberating the new legal tender bill, which will replace provisions governing the national currency that are currently found in the Bank Indonesia Law, the Criminal Code, the 1981 Currency Counterfeiting Law and the 2003 State Finances Law.
The 12-chapter bill envisages criminal sanctions for anyone who refuses to accept the rupiah as payment for a transaction within the national territory, and harsher punishments for counterfeiters.
"We don't want anyone to reject the rupiah in any commercial transaction," committee member Bomer Pasaribu told The Jakarta Post on Tuesday. "It is more than a mere means of conducting transactions. It is the symbol of our sovereignty," he said.
The bill says that anyone who refuses to use or accept the rupiah as part of a transaction will be subject to a year's imprisonment and a fine of Rp 200 million (US$22,222).
Bomer said the law, if enacted, would be effective throughout the country, with the exception being special economic zones, ports and designated tourist attractions where large volumes of foreign currency circulate.
Hotels and some electronics stores in the nation's big cities frequently charge their customers United States dollar rates.
"There will be more leeway in certain areas. The details will later be set out in a government regulation," he said, adding that some other matters would be further spelled out by Bank Indonesia regulation.
The bill is also aimed at curbing increasing counterfeiting. The central bank has reported that the ratio between detected counterfeit notes and the number of notes it issued per month last year was 142 to one hundred million.
Counterfeiting is carried out by organized and crossborder criminals equipped with sophisticated technology.
"In other countries, counterfeiters are severely punished," Bomer said, adding that the bill would aim to do the same in Indonesia, although he admitted that the committee had no plans to treat it as an "extraordinary crime", like terrorism or corruption.
Currency counterfeiting is currently dealt with under the Criminal Code. While this states that counterfeiters can get up to 15 years in jail, the police often treat them as petty criminals, and they frequently get off with only a few months in jail.
"We want harsher punishments," Bomer stressed.
The central bank said it supported the bill and hoped that more effective measures against counterfeiting would help ensure the stability of the rupiah.
Bomer said the bill was also aimed at anticipating the possibility of a common currency being adopted by the ASEAN countries. "It will give us a stronger bargaining position," he said.
The legislators expect that deliberation of the bill will be completed this year.