Government Reviews Higher Local Content Rules for Tech Industry
- Istimewa.
Jakarta, VIVA – The Indonesian government, through the Ministry of Communication and Digital Affairs and the Ministry of Industry, is preparing a collaboration to consider policy adjustments in reviewing an increase in the percentage of Domestic Content Level (TKDN), particularly for the technology industry.
According to the Minister of Communication and Digital Affairs, Meutya Hafid, the consideration to increase the TKDN percentage for the technology industry stems from the current regulations, which have remained unchanged for nearly a decade since 2017.
"We will assess whether we can raise the TKDN to support the domestic industry. Of course, this needs thorough evaluation. Right now, we have a team working on this with the Ministry of Industry," Minister Hafid said on Thursday (Dec 12).
Currently, the TKDN requirement for the technology industry is based on the 2017 regulation, which sets the percentage at 35 percent.
Menteri Komunikasi dan Digital (Menkomdigi), Meutya Hafid.
- Dok. Kemenkomdigi
Raising the TKDN percentage is expected to strengthen the domestic industry, though it requires efficient evaluation. A comprehensive review is necessary to ensure the needs of the industry are accommodated while also encouraging more local technology manufacturers.
"It has been quite a while. We are reviewing this, as over seven years have passed. We need to assess whether we are ready to mandate a 40% TKDN, particularly for industries related to technology," the minister explained.
Regarding TKDN for gadgets specifically, the industry currently adheres to the provisions outlined in the Minister of Communication and Informatics Regulation No. 13 of 2021, signed on October 12, 2021.
This regulation became effective around April 2022, but the 35 percent requirement has remained unchanged since 2017.
Products that do not meet the 35% TKDN requirement are prohibited from circulating in Indonesia. There are three investment schemes for manufacturers of mobile phones, laptops, and tablets (HKT) under the TKDN framework: the manufacturing scheme, the application scheme, and the innovation scheme.