New Rules on Money or Item Collecting Activities for Social Purposes in Indonesia
At the end of September 2021, the Minister of Social Affairs (“MoSA”) issued Ministerial Regulation No. 8 of 2021 on Money or Items Collecting Activities (“MoSA 8/2021”), as a government attempt to support a more systematic social-welfare mechanism for collecting money and items by the community to improve people’s welfare in terms of mental, religious, spiritual, physical, or cultural interests.
MoSA Regulation 8/2021, revoked MoSA Decree No. 1/HUK/1995 on Collection of Donations for Disaster Victims and MoSA Decree No. 56/HUK/1996 on Implementation of Community Donations Accumulation.
Money or Item Collecting Permits: Activities involving money or items collecting require the permit of the authorized minister, governor, regent, or mayor (Art. 3 (3) of MoSA Regulation 8/2021). Furthermore, such activities can only be done by non-governmental organizations such as mass/community organizations or foundations (Art. 3 (2) of MoSA Regulation 8/2021).
Certain activities involving money or item collecting require no government permits, including those:
- for “zakat” (Islamic almsgiving) purposes;
- held in gatherings at places of worship;
- held for an emergency in a confined environment;
- for mutual cooperation in limited environments like schools, offices, community or neighbourhood units, sub-district or village facilities; and/or;
- held spontaneously within limited meetings.
Requirements to Obtain the Permit for Money or Item Collecting Activities: The authorized agencies to issue the permits are:
- the provincial government of the applicant's domicile for any permit application addressed to the minister, or
- the district/city government of the applicant's domicile, if the application is addressed to the governor (Art. 5 (2) of MoSA Regulation 8/2021).
To obtain the permit, an applicant must submit the following supporting documents:
- certificate of registration of the (mass/community) organization issued by the Ministry of Law and Human Rights;
- certificate of domicile or business registration number;
- Taxpayer Registration Number (Nomor Pokok Wajib Pajak);
- proof of payment of Land-and-Building Tax or proof of lease agreement of the applicant’s premise;
- bank account details for holding the relevant collected funds;
- proof of identity of the applicant or management or head of the organization;
- statement letter signed with stamp duty stating that the collected funds will not be used for radical, terrorism, and/or unlawful activities;
- proof of registration if the applicant is a Social Security Agency;
- recommendation of the relevant government official (i.e., provincial or local government, as relevant);
- proposal and samples of the advertising or promotion publication that are not in contravention with humanity values. (Art. 5 (1) – 5 (3) of MoSA Regulation 8/2021)
In essence, the mass organization is required to disclose the details, specifications, and objectives of the program they organize to the relevant institutions to obtain further approval. If approved, the permit will be valid for three months and can be extended once for a maximum of one month (Art. 11 of MoSA Regulation 8/2021).
Money or Item Collecting Activities and Distribution Procedure: Article 10 of the regulation stipulates that money or item collecting can be done by organizing bazaars, festivals, auctions, and other fundraising events (Ar. 10 of MoSA Regulation 8/2021). The money or items already collected shall be distributed to various organizations in social welfare, health, education, other fields to be given to designated individuals, families, or communities (Art. 12 (1) and (3) of MoSA Regulation 8/2021).
Sanctions: Indonesia’s government may impose administrative or criminal sanctions on administrators who have no permits, or who have the permit but fail to meet the provisions of MoSA Regulation 8/2021. Administrative sanctions can be written warnings, suspension of the permits, and/or revocation of the permits (Art. 27 of MoSA Regulation 8/2021). Criminal sanctions are not specifically regulated. They will be carried out in accordance with the provisions of the legislation (Art. 30 of MoSA Regulation 8/2021).
The above article was prepared by Marshall S. Situmorang (Partner) and Audria Putri (Senior Associate).