Insights / Updates

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Brighter Days Ahead as Indonesia's Ministry of Energy and Mineral Resources Revised Regulation on Rooftop Solar System

In August this year, the government revisited the regulation on rooftop solar systems and issued the Ministry of Energy and Mineral Resources ("MEMR") Regulation No. 26 of 2021 ("New Regulation"). This New Regulation became effective from 20 August 2021 and regulates rooftop solar system connected to the power supply grid owned by the holders of power supply business licence for public interest (Izin Usaha Penyediaan Tenaga Listrik untuk Kepentingan Umum) or commonly referred to as IUPTLU.

Despite their increased global popularity, buildings or properties with rooftop solar systems are still relatively rare in Indonesia. Previously, the government had already issued two regulations on rooftop solar systems, namely MEMR Regulation No. 1 of 2017 and MEMR Regulation No. 49 of 2018, as amended several times and lastly by MEMR Regulation No. 16 of 2019. The former regulated, among others, the parallel operation of a rooftop solar system and the electricity network owned by PLN – Indonesia’s state electricity company, while the latter regulated utilisation of a rooftop solar system by consumers of PLN. While the New Regulation revoked the 2018 regulation in its entirety, only the parallel operation related to the utilisation of rooftop solar system provisions in the 2017 regulation are revoked.

New Rules for Appealing Competition Cases

When the Omnibus Law (Law No. 11 of 2020) was enacted, one of the changes in the competition law regime was moving the appeal against decisions of the Indonesia Competition Commission (“KPPU”) from the district court to the commercial court. As predicted, there were concerns in applying this new appeal procedure (click here to read).

Finally, on 16 September 2021, the Supreme Court issued a regulation regarding appeal to the commercial court (Supreme Court Regulation No. 3 of 2021 on the Submission and Examination of Appeal against KPPU Decision in the Commercial Court). This new regulation revoked Supreme Court Regulation No. 3 of 2019, which regulated appeals of KPPU decisions in the district court.

Leveling the Playing Field, the Government Cuts Income Tax Rate on Bonds for Local Investors

Following the decrease in income tax for interests on bonds received by foreign investors to 10% under the Omnibus Law (Law No. 11 of 2020), the government has given the same treatment to local investors under Government Regulation No. 91 of 2021. This Regulation replaces Government Regulation No. 16 of 2009, which was lastly amended by Government Regulation No. 55 of 2019. Under this new Regulation, the final income tax rate on interests from bonds received by local investors decreases from 15% to 10%.

This Regulation marks a turning point not only for local investors but also for the local bonds market. Moreover, it is also in line with Indonesia’s National Medium-Term Development Planning, which achievement requires significant funding in order to increase financial inclusion, expand innovation of financial products, develop financial services, and optimise means of alternative financing.