Target dates for reforms
Target dates for reforms
JAKARTA (Reuters): Individual target dates for implementation of key points in a reform package announced yesterday.
By April 22, 1998:
* set minimum capital requirements for banks of Rp 250 billion by end-1998, after loan loss provisions.
* make loan loss provisions fully tax deductible, after tax verification.
* transfer claims resulting from past liquidity support from Bank Indonesia (the central bank) to the Indonesian Bank Restructuring Agency (IBRA).
* take first steps on reducing export taxes on logs, sawn timber, rattan and minerals to a maximum of 30 percent by April 15, 1998; 20 percent by end-December 1998 and 15 percent by end- December 1999; and 10 percent by end-December 2000.
* phase in resource rent taxes on logs, sawn timber and minerals.
* remove ban on palm oil exports and replace by export tax of 40 percent. The level of the export tax will be reviewed regularly for possible reduction, based on market prices and the exchange rate, and reduced to 10 percent by end-December 1999.
* lift restrictions on foreign investment in wholesale trade.
* establish monitoring system for structural reforms.
* make credible progress toward an agreement on corporate debt restructuring.
* enact government regulation in lieu of law to amend the bankruptcy law and establish a special commercial court.
By April 24, 1998:
* publish key monetary data on a weekly basis.
* announce seven enterprises to be privatized in 1998/99.
By June 30, 1998:
* introduce single tax payer registration number.
* increase non-oil tax revenue by raising annual audit coverage, developing improved VAT audit programs and increasing recovery of tax arrears.
* upgrade the reporting and monitoring procedures for foreign exchange exposures of banks.
* appoint high level foreign advisors to Bank Indonesia to assist in the conduct of monetary policy.
* submit to Parliament a draft law to eliminate restrictions on foreign investments in listed banks and amend bank secrecy with regards to non-performing loans.
* establish new asset resolution entity for bad debts within IBRA.
* establish an independent review committee to enhance transparency and credibility of IBRA operations.
* merge two state-owned banks and conduct portfolio reviews of the two banks.
* draft legislation enabling state bank privatization.
* introduce legislation to amend the banking law in order to remove the limit on private ownership of banks.
* issue a revised and shortened negative list of activities closed to foreign investors.
* eliminate BPPC (Clove Marketing Board).
* conduct a public expenditure and investment review in collaboration with World Bank.
* establish procedures for government procurement and contracting for private sector involvement in the provision of infrastructure.
* identify an additional five enterprises to be listed in 1998/99.
* review and raise stumpage fees.
* auction forest concessions and lengthen concession periods.
* allow transferability of forestry concessions and delink their ownership from processing for new concessions.
By August 30, 1998:
* conduct portfolio, systems and financial reviews of all IBRA banks as well as major non-IBRA banks by internationally recognized audit firms.
By September 1998:
* conduct thorough review of central bank and banking laws in preparation for revising legal framework for banking operations.
* remove the 49 percent limit on foreign investment in listed companies.
* abolish quotas limiting the sale of livestock.
* establish clear framework for management and privatization of government assets, including criteria for determining whether enterprises are privatized, restructured or closed. Also establish transparent sales process.
* prepare action plans for all 164 public enterprises.
* establish clear profit and performance targets for remaining government enterprises.
* develop a plan for closing non-viable public enterprises.
* prepare regulations establishing procedures for mergers, acquisitions and exit which facilitate corporate restructuring while safeguarding against anti-competitive behavior.
By October 1, 1998:
* eliminate subsidies on sugar, wheat flour, corn, soybean meal and fishmeal.
* prepare plan for restructuring IBRA banks through mergers, transfers of assets and liabilities or recapitalization prior to privatization.
By December 31, 1998:
* submit to Parliament a draft law to institutionalize Bank Indonesia's autonomy.
* audit non-viable public enterprises.
* draft and establish implementation rules for the new environment law.
* implement performance bonds and reduce land conversion targets to environmentally sustainable levels.
* submit to Parliament draft law on competition policy.
By March 31, 1999:
* divest seven enterprises which are to be privatized in 1998/99.
By December 31, 1999:
* accelerate programs for converting to cleaner fuels.