Micro and small business actors with a turnover of below Rp1 billion per year will be given free halal certification through government subsidies after the enactment of the Job Creation Law.

Micro, small and medium enterprises (MSMEs) can now get free halal certification from the government with the enactment of the Job Creation Law.

MSMEs previously have to spend time, energy, and money to obtain halal certification. The Job Creation Law enactment makes it easier to obtain halal certification which opens up new opportunities.

Minister of Cooperatives and Small and Medium Enterprises (SMEs) Teten Masduki even said that the enactment of the Job Creation Law was a milestone in the revival of MSMEs in Indonesia. "Micro business actors will be given free halal certification from the government. This is the revival of MSMEs," said the Minister of Cooperatives and SMEs Teten Masduki in Jakarta, Tuesday, 13 October.

The process of halal certification which is difficult and expensive is often complained by MSMEs causing there are only few of them have halal certification. Even though, the requirements for halal certification, especially food products, are absolutely necessary, both for domestic and global markets.

The halal label is also very important to provide added value and competitiveness of MSMEs, especially in the health and security sector. Apart from the halal certificate, an Indonesian National Standard (SNI) is also required. "This certification has been a burden for MSMEs, so it is difficult to sell their products. This certification is now free with the enactment of the Job Creation Law and added by the presence of an agency that carries out the examination and the Indonesian Ulema Council (MUI) that issues it," Tetan added.

MSME as the Backbone of the Economy

MSMEs have become the backbone of the national economy. As much as 97 percent of employment in Indonesia comes from the MSME sector. The ratification of the Job Creation Law will strengthen MSMEs to grow and develop and have competitiveness.

The government believes that MSMEs sector will absorb even more workers. The unemployment rate is recorded at more than seven million people. This number has not been added to the new layoffs which reached three million people. The enactment of the Job Creation Law which regulates from upstream to downstream, starting from MSME licensing, financing, market access, and improving supply chains, certainly raises optimism that MSMEs can develop by absorbing even more labor.

Many business actors have adapted and innovated their products due to the COVID-19 pandemic. Now as many as 60 percent of MSMEs engaged in the food and beverage sector have experienced an increase in sales amid the pandemic through online sales to meet demand from home.

However, not all MSMEs get this free certification facility. The government only provides this facility for MSMEs with a turnover of below Rp1 billion per year. Businesses that are prioritized are businesses engaged in the food and beverage sector.

As information, the halal certificate serves as proof that a product that is sold for consumption or use, such as food, drink and skincare or make-up, does not contain a composition that is prohibited by Islamic law.

In addition to exemption from the cost of the halal certification process, eligible MSMEs can also get free fees for renewing the certificate. This government policy is in line with Law number 33 of 2014 concerning Halal Product Guarantee (JPH) which requires all business actors to have a halal certificate.

This halal product certification program has been started by the government since17 October 2010. This certification program requires ownership of a halal certificate for all products marketed in the domestic market.

This policy aims to accelerate the halal product certification program, especially for MSMEs in the food and beverage sector. The government schedules food and beverage products to be fully certified until the deadline of 17 October 2024.

Consumers who will buy a product will feel much safer with a halal certificate. This of course will also affect their sales.

MSMEs wishing to obtain a halal certificate must apply for a halal certificate in writing to the Halal Product Guarantee Agency (BPJPH). BPJPH is an agency formed by the government to organize JPH.

BPJPH will assign a halal inspection agency (LPH) to carry out an inspection and/or test for the halalness of the product. LPH determination is made within a maximum period of five working days from the time the application documents are declared complete. LPH can be established by the government and society.

BPJPH then submits the results of the examination to MUI to obtain a confirmation of the product's halalness. Determining the halalness of a product is under the authority of MUI, preceded by the Halal Fatwa Meeting.

Writer: Firman Hidranto
Editors: Putut Tri Husodo/Elvira Inda Sari/Ratna Nuraini/Sugiarti
Translator: Irvina Falah