Signed by Jokowi, the Job Creation Law Officially Applies

JAKARTA. President Joko Widodo (Jokowi) officially passed the Law on Job Creation on November 2, 2020. Thus, all provisions stipulated in Law number 11 of 2020 are officially valid.

This signing is done before the deadline for ratification as it should be, which is a maximum of 30 days. Because if it refers to the approval date of the House of Representatives (DPR) on 5 October, the ratification deadline falls on 5 November 2020.

The regulation that has revised a number of laws, including those concerning taxation regulations, consists of 15 chapters and 185 articles. To be able to access this 1,187-page law, the public can download it through the official website of the Ministry of State Secretariat (Setneg).

Read: Omnibus Law on Job Creation Relaxes Income Tax Provisions

Several tax regulations that were also revised include the Income Tax Law, the Value Added Tax and Sales Tax on Luxury Goods (PPN and PPnBM) Law and the Law on Taxation General Provisions and Procedures (KUP).

One of the tax provisions that has changed is related to the taxation system that becomes territorial-based. In addition, this regulation also reduces the number of tax objects, and adds to the dividend criteria that are exempt from tax imposition and several other provisions.

Previously, the drafting of the Job Creation Law had received a rejection from the public, by holding demonstrations in various places. The rejection arose because many parties considered the drafting process is not transparent and rushed.