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.