elements of business climate faced by firms such as taxation, custom, infrastructure, labor regulation, and business licensing which have been known as important obstacles to doing business in Indonesia.
The survey produces several interesting results. First, the FDI approval in BKPM is still slow, discretionary and unnecessary. Inefficiency and corruption remain major problems at the import clearance procedure-Customs, port authorities and other entities share responsibilities. Human contact is still the source of informal payment in export-import clearance. Minimization of human contact can be pursued further by full implementation of the EDI system. Also port infrastructures should be improved to shorten waiting time in unloading, by doing so eliminate these as sources of corruption and inefficiency. VAT refunds are still major problems for exporters, with 57% of respondents reporting that they have to negotiate with tax officials or make extra payments to obtain refunds. In other areas of taxation the requirement to file income tax returns on a monthly basis should be reviewed as this imposes a significant paperwork burden, with businesses forced to devote 45 man-days on average each month to filing tax returns. Relative to the first years of regional autonomy, the ?squeeze? on business through informal payment demanded by local government. But national authorities, such as customs and tax, might not feel the same competitive pressures as they continue to exert negative burdens on business.
Ari Kuncoro
Isfandiarni
Thia Jasmina
Cita Wigjoseptina
