Government to Issue Financial Policy Package
Wednesday, 10 January, 2007 | 13:16 WIB

TEMPO Interactive, Jakarta: The government will issue a new package of financial policies.

This policy packages will be the advanced step of three policy packages that include financial, investment and infrastructure sectors, issued at the beginning of 2006.

According to Mohamad Ikhsan, a member of the Special Staff of the Coordinating Minister for the Economy, the new policy package will include reform in the retirement fund and insurance industry sectors.

The role of the retirement fund and insurance sectors must be improved because both sectors have large potential as financing sources for economic activities.

“Previously, improvements were aimed at the banking sector. However, it is now intended to non-banking financial institution,” Mohamad said yesterday (01/09) in Jakarta.

With the new policies, he said, it was expected that there could be healthy competition between banking and non-banking financial institutions in the financing of economic activities.

“Funds from retirement fund and insurance institutions can be used to finance long-term investment activities,” he said.

In addition, retirement fund and insurance institutions will be more actively investing in the capital market.

“This is aimed at preventing stock exchanges in Indonesia depending on the flow of foreign funds.”

In response, Saebani Hardjono, President Director of Retirement Fund of Pertamina, said he expected that in these advanced financial policy packages there would be greater clarity as regards investment tax exemption on deposit accounts and bonds.

Saebani said he hoped that tax exemption for retirement fund investors was extended to capital profits on bond investments. “Make it equal,” he said.

Saebani also asked that the government expand tax exemption to retirement fund investment on insurance unit linked products.

Budiriza