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The Circular Letter of the PUPR Minister addressed to the Indonesian National Consultancy Association Inkindo affirms that each and every consultant is prohibited from submitting bids outside the billing rate threshold. Besides preventing the practice of excessive discounting, the policy is intended to enable simpler supervision.

It is not uncommon, Arie explained, for consultants who win bids by submitting low quotations to hide behind low prices as excuses for poor performance. With the new and more transparent scheme, it is expected that those excuses will not stop occurring. However, transparency should not only apply to auction schemes, but also financing schemes in infrastructure development.

Starting next year, the new availability payment scheme will be activated. With this new scheme, investors will be offered to build and provide services upfront. Subsequently, the Directorate of Bina Marga will settle the payment in instalments, in line with its budget.

Gradually, Arie continued, Bina Marga will perform post-development evaluation for two years. Payment will start in the third year if the project is deemed to be in line with requirements related to planning, quality and construction.

Arie said the scheme should be beneficial to the state, as the benefits of the development could be enjoyed sooner by the public. In this new scheme, it is calculated that roads and bridges construction in would require around Rp7.

The latest, new scheme that the Bina Marga has tested is the reimbursement scheme, a result of collaboration with Australia.

It is quite similar to the grant scheme, with the only difference being the mandatory upfront payment for the development by the regional government. He continued that the scheme has already been proposed to the National Development Planning Agency Bappenas and the Ministry of Finance. The scheme is expected to encourage all parties, particularly regional governments, to fully support the acceleration of infrastructure development.

The scheme, which has been road-tested and proven to be successful in development applications in West Nusa Tenggara, will be deployed evenly across Indonesia. The ultimate goal is to achieve the development acceleration target as proclaimed by the government of President Joko Widodo and Vice President Jusuf Kalla.

Julian Smith. Agung Wiryawan. David Ray. All rights reserved. Please see www. Follow PwC Indonesia. Publications Industries Publications Services Publications. Privacy statement Legal disclaimer About site provider Site map.



Indonesia adopts the self-assessment method for individuals to calculate, settle, and report income tax. Extended business travelers are likely to be taxed on employment income relating to their period of stay in Indonesia. A permanent establishment PE may potentially be created as a result of business travels. Corporations should be mindful of the visa used by their extended business travelers to Indonesia. Taxable income is determined after subtracting allowable deductions and personal allowances. A person is considered resident in Indonesia if they are present in Indonesia for a total period of more than days in any month period, or if the person resides in Indonesia with the intention of staying. Non-resident individuals are those who are not resident in Indonesia for tax purposes.


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