Govt to Impose Higher Income Tax to Foreign Workers


Christina Desy, Fitri Novia Heriani, Agus Sahbani
 
With the upcoming commencement of the ASEAN Economic Community (AEC), there is a growing concern about a potential influx of foreign workers into Indonesia. One particular concern is higher unemployment amongst Indonesian citizens which could harm the national economy.
 
Eugenia Mardanugraha, an economist from Universitas Indonesia, says that competition for jobs between domestic and foreign workers in Indonesia is common, especially for high-profile positions. Ms. Mardanugraha believes that highly qualified Indonesian workers can equally compete with their foreign counterparts.
 
“The concern is more about the middle to low-profile fields,” said Ms. Mardanugraha last Thursday.
 
Ms. Mardanugraha believes that the government needs to implement certain preventive measures to keep middle to low level positions from being dominated by foreign workers. One possible suggestion to counter this is to impose higher taxes on foreign workers as is already implemented in other countries.
 
In addition, Ms. Mardanugraha highlights the importance of certification of Indonesian qualifications. Hopefully, there will also be an agreement between ASEAN members for mutual recognition of qualifications so that Indonesian workers can easily work in other ASEAN countries.
 
Commenting on this issue, Hanif Dhakiri, Minister of Employment, believes that Indonesian workers need to improve their skills so that they can compete with foreign workers at both the regional and global levels.
 
To assist with this, the Minister is promising to establish better coordination between relevant training institutions, regional governments and his Ministry to provide improved training systems and competencies to increase the number of specialist workers.
 
Employment vs. Investment
Another issue closely related to foreign workers is foreign investment. Timboel Siregar, Secretary General of Indonesian Workers Organization, says that there are many examples of foreign investors requesting Indonesia to open certain business sectors for their workers as a prerequisite for their investment.
 
This strategy usually results in deviations from Indonesian laws and regulations on foreign workers. Mr. Siregar referred to regulations that limit certain positions from being available for foreign workers and commented that he often finds examples of many prohibited positions being filled by foreign workers.
 
Mr. Siregar added that the situation is being further worsened by a lack of a proper monitoring system in Indonesia. Based on his observations, he says that the Ministry of Employment often issues foreign worker employment permits without maintain sufficient systems to monitor them.
 
Mr. Siregar expects the government to engage in better negotiations in relation to foreign investment to protect Indonesian workers. He is also urging the government to implement a more effective monitoring system for the employment of foreign workers in Indonesia.
 
(hot/kc)

Christina Desy, Fitri Novia Heriani, Agus Sahbani
 
With the upcoming commencement of the ASEAN Economic Community (AEC), there is a growing concern about a potential influx of foreign workers into Indonesia. One particular concern is higher unemployment amongst Indonesian citizens which could harm the national economy.
 
Eugenia Mardanugraha, an economist from Universitas Indonesia, says that competition for jobs between domestic and foreign workers in Indonesia is common, especially for high-profile positions. Ms. Mardanugraha believes that highly qualified Indonesian workers can equally compete with their foreign counterparts.
 
“The concern is more about the middle to low-profile fields,” said Ms. Mardanugraha last Thursday.
 
Ms. Mardanugraha believes that the government needs to implement certain preventive measures to keep middle to low level positions from being dominated by foreign workers. One possible suggestion to counter this is to impose higher taxes on foreign workers as is already implemented in other countries.
 
In addition, Ms. Mardanugraha highlights the importance of certification of Indonesian qualifications. Hopefully, there will also be an agreement between ASEAN members for mutual recognition of qualifications so that Indonesian workers can easily work in other ASEAN countries.
 
Commenting on this issue, Hanif Dhakiri, Minister of Employment, believes that Indonesian workers need to improve their skills so that they can compete with foreign workers at both the regional and global levels.
 
To assist with this, the Minister is promising to establish better coordination between relevant training institutions, regional governments and his Ministry to provide improved training systems and competencies to increase the number of specialist workers.
 
Employment vs. Investment
Another issue closely related to foreign workers is foreign investment. Timboel Siregar, Secretary General of Indonesian Workers Organization, says that there are many examples of foreign investors requesting Indonesia to open certain business sectors for their workers as a prerequisite for their investment.
 
This strategy usually results in deviations from Indonesian laws and regulations on foreign workers. Mr. Siregar referred to regulations that limit certain positions from being available for foreign workers and commented that he often finds examples of many prohibited positions being filled by foreign workers.
 
Mr. Siregar added that the situation is being further worsened by a lack of a proper monitoring system in Indonesia. Based on his observations, he says that the Ministry of Employment often issues foreign worker employment permits without maintain sufficient systems to monitor them.
 
Mr. Siregar expects the government to engage in better negotiations in relation to foreign investment to protect Indonesian workers. He is also urging the government to implement a more effective monitoring system for the employment of foreign workers in Indonesia.
 
(hot/kc)
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