An Introduction to the Proposed Omnibus Law
by Lina Amran, Kurniawan Tanzil, Stephanie Kandou, Budhy Apriastuti Evita
Published: December, 2019
Submission: January, 2020
According to the World Bank’s 2019 Doing Business index, Indonesia sits in 73rd position overall out of 190 countries in terms of ease of doing business. President Joko Widodo has set as a target increasing Indonesia’s ranking to 40th position.
To boost investment and ease of doing business in Indonesia, in his inauguration speech on 20 October 2019, President Joko Widodo introduced the idea of enacting an Omnibus Law. Before it is mentioned by President Joko Widodo, the concept of ‘Omnibus Law’ is rarely heard in Indonesia which adopts a civil law system. Omnibus law or Omnibus bill is a more common concept in the common law system. As the title implies, the Omnibus law, is a single law covering various distinct matters.
The President has asked for two major areas to be covered by the Omnibus Law: the creation of employment and the empowerment of Micro, Small and Medium-scale Enterprises (UMKM). The Omnibus Law that the Government of Indonesia will draw up will amend (or even replace) several laws which are hampering the creation of employment and investment in Indonesia. About 74 laws will be amended or replaced by the Omnibus Law.
In addition to the above, the Omnibus Law will re-regulate the tax sector and licensing matters in Indonesia. The Ministry of Finance is working on the draft Omnibus Law on the tax sector and the Coordinating Ministry of Economic Affairs is working on the draft on licensing.
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