LKPM for PMA companies

[Dave70]

My PMA company has been in existence for more than 10 years. Every quarter, we have to file 'Laporan Kegiatan Penanaman Modal' or LKPM with the Ministry of Investment or BKPM. I think this is a waste of resources, and completely unnecessary. If BKPM wants to check the existence of a business, why not link with the tax office? If a business is filing monthly tax report (SPT Masa) and annual tax report (SPT Tahunan), that should prove that the business still exists. Imagine filing LKPM 4 times a year for more than 10 years, for what? Please, we have lots of work to do. I'm sure BKPM has lots of work to do too.

Those of you who work in a PMA company, is your company still filing LKPM?

 

[Brian86]

Of course I would prefer not to report, but it's really not a bother. With a good accounting system it only takes 15 minutes to compile the numbers, enter them, and submit the report. You must have some sort of administrative/accounting staff, no?

 

[Dave70]

Of course I would prefer not to report, but it's really not a bother. With a good accounting system it only takes 15 minutes to compile the numbers, enter them, and submit the report. You must have some sort of administrative/accounting staff, no?

It's a hassle nonetheless, especially when there is a change of staff. The whole point is why this is still necessary when a company has been in operation for a number of years. Can't they just monitor the activities through tax filing and payments? LKPM should not be required for businesses already in operation, I would say that if they asked for my opinion.

 

[centurion]

My PMA company has been in existence for more than 10 years. Every quarter, we have to file 'Laporan Kegiatan Penanaman Modal' or LKPM with the Ministry of Investment or BKPM. I think this is a waste of resources, and completely unnecessary. If BKPM wants to check the existence of a business, why not link with the tax office? If a business is filing monthly tax report (SPT Masa) and annual tax report (SPT Tahunan), that should prove that the business still exists. Imagine filing LKPM 4 times a year for more than 10 years, for what? Please, we have lots of work to do. I'm sure BKPM has lots of work to do too.

Those of you who work in a PMA company, is your company still filing LKPM?

LKPM is filed twice a year for established businesses.

It is an insane waste of resources, and work time, and the analytical value of these data is insignificant, as many input random numbers ( garbage in garbage out), or don't input at all.

The idea is that they (government-BKPM) follow the business activity of all foreign (and now local as well) companies in regular time intervals. This is of course nonsense and an unsuccessful try by the Indonesian government to micromanage everything. There you see these overinflated numbers of "foreign investment coming to Indonesia", a lot of numbers but not so much money in actually.

All relevant data are in the tax office and should be taken from there. But then what would you do with a bunch of government employees doing these useless jobs?

 

[Dave70]

LKPM is filed twice a year for established businesses.

Indeed, it used to be twice a year. But recently changed to quarterly, that's what I'm told.

 

[jstar]

LKPM is filed twice a year for established businesses.

No, it’s four (4) times per year if Dave’s company is not a foreign representative office or not small. Also, there are quite some exceptions (e.g. financial institutions).

Edit: I looked it up in the PP 5/2021: See Pasal 32.

https://jdih.maritim.go.id/cfind/source/files/peraturan-bkpm/perka-bkpm-nomor-5-tahun-2021.pdf

 

[centurion]

It is 4 times per year for business lines that are in the construction (preparation) stage, and 2 for established ones (production stage).

Looks like your business lines are not in the production stage yet-or the one who works on the reports did not update them to be in the production stage.

This also underlines how complicated and ununderstandable this system is, for Indonesians and foreigners to comprehend. And the report itself is complicated to do and file, and actually requires the enterprise value (EV) of the company-hardly employees and company owners to know what is unless they have a finance degree.

 

[ChrisTex]

It's a hassle nonetheless, especially when there is a change of staff. The whole point is why this is still necessary when a company has been in operation for a number of years. Can't they just monitor the activities through tax filing and payments? LKPM should not be required for businesses already in operation, I would say that if they asked for my opinion.

That would make too much sense. Besides, governments exist to make things complicated when they don't need to be.

 

[Brian86]

The whole point is why this is still necessary when a company has been in operation for a number of years. Can't they just monitor the activities through tax filing and payments? LKPM should not be required for businesses already in operation, I would say that if they asked for my opinion.

I believe their data encompasses more than the tax reports collect, particularly with differentiating foreign investment and imported versus domestic purchases. I agree in preferring the requirement didn't exist, but of all the annoying, excessive bureaucracy in Indonesia, LKPM reporting isn't in my top 10.

 

[centurion]

I believe their data encompasses more than the tax reports collect, particularly with differentiating foreign investment and imported versus domestic purchases. I agree in preferring the requirement didn't exist, but of all the annoying, excessive bureaucracy in Indonesia, LKPM reporting isn't in my top 10.

It encompasses, but the problems are that it is self-reporting, meaning data are not accurate, or people put random numbers or do not file at all, ergo these data, and any analytics based on this data are completely and utterly useless.