Jakarta. The government is tightening requirements to force companies to repatriate revenue from the export of natural resources, Coordinating Economic Affairs Minister Darmin Nasution said on Friday, as authorities seek to support a fragile rupiah.
Special accounts will be created for exporters to deposit export revenue at local banks to allow for better monitoring by the government, Darmin told reporters. The new regulation due to take effect Jan. 1.
Companies would be barred from exporting if they do not repatriate earnings but would be allowed to keep earnings in dollars, though there would be tax incentives if they convert earnings to rupiah, he said.
Darmin said companies would be allowed to use the repatriated proceeds to fund imports or foreign debt payments.
"It is mandatory to repatriate the earnings and deposit them in the [banking] system. The earnings can still be used for the companies' needs, but supporting documents must be provided," he said. "We have to formulate policies to give confidence to fund owners so that they will flow into the country, whether it is short-term capital inflow, or foreign direct investment," the minister said.
The government has required exporters to receive their earnings through onshore banks since 2012. Bank Indonesia data shows while 90 percent of such earnings already flow through local banks, only 15 percent of these funds are converted to rupiah.
The rupiah has strengthened 1.5 percent over the past two days, driven higher by the central bank's surprise interest rate rise on Thursday and climbing off from levels not seen since the 1998 Asian financial crisis.
The government also said on Friday that it would relax foreign investment restrictions to help boost investment.
Darmin said 54 business sectors previously partially closed to foreign ownership would be opened for full foreign ownership.
These include fabric printing, weaving and certain dairy processing industries, Industry Minister Airlangga Hartarto said.
The policy package will also include the expansion of Indonesia's tax holiday program.