Inspection & Audit Services

Know the Calculation Components of the TKDN Verification Agency

Company Credibility Seen from a Professional TKDN Verification Agency

The TKDN verification agency is the party that verifies the TKDN achievement value, which is calculated independently by the goods/services provider. The verification results are one of the requirements for issuing a TKDN Certificate by the Ministry of Industry.

This institution verifies components of goods, services, or a combination of both. In addition to complying with regulations, the benefits of TKDN verification are substantial for economic development, including reducing dependence on goods and creating new jobs.

The domestic industry will continue to produce so that it will add jobs. It is creating a supply chain that requires suppliers to open factories in Indonesia.

The implementation of TKDN also encourages the industry to reduce dependence on imports in various production fields. Primarily through determining the minimum value of TKDN based on the industrial sector.

Definition and Types of TKDN

TKDN is a percentage of the value of production components made in Indonesia for goods and services or a combination of domestic goods and services. Included are the transportation costs offered in the item offering prices for goods and services.

The Domestic Component Level or TKDN is one of the preferences for determining winners in procuring goods and services in several agencies. This percentage aims to maximize the use of domestic products.

In this case, a certain percentage of imported components is imposed on manufactured goods. As an effort to succeed in the export of domestic products. There are three types here, namely:

1. TKDN Goods

The percentage is calculated based on comparing the price of finished goods minus the fee of foreign components. The price is issued for production costs, including costs for direct materials, direct labor, and indirect factory (Factory Overhead).

2. Type of Service

The calculation by the TKDN verification agency is based on comparing the overall service price minus the price of foreign services. The overall service price is the cost incurred to produce the service, calculated up to the work location (On-Site).

3. Combination of Goods and Services

The calculation by the TKDN verification agency is based on comparing the combined prices of the overall goods and services. Then subtract the combined prices of foreign goods and services from the overall combined prices of goods and services.

The valid mark of the Domestic Component Level certificate and or BMP verification results is signed by the official. This official is appointed by the Secretary General of the Ministry of Industry on behalf of the Minister of Industry.

What are the Components of TKDN Calculation?

In carrying out its functions, the TKDN verification agency performs calculations for several components. This component is a technical assessment based on products and services plus the BMP value, namely the Company’s Benefit Weight.

1. Item components

Including the use of raw materials, design, and engineering. The engineering here is related to manufacturing, fabrication, assembly, and final completion of work originating and carried out domestically.

2. Components of services

Namely the use of services until the final delivery. Utilizing workforce including experts, software tools, and supporting facilities from and implemented in Indonesia. This is the main job of the TKDN verification agency.

3. Combined components of goods and services

The use of raw materials, design, manufacturing engineering, fabrication, and assembly until the completion of the work. This includes using services by experts, work tools including software, and supporting facilities.

TKDN Verification

To ensure that the industry complies with the established regulations, the government verifies the TKDN value of goods/services and the Bobot Manfaat Perusahaan (BMP). The process is carried out directly by the TKDN verification agency.

Verification includes the production stage, the machines used, direct and indirect labor, and indirect factory costs such as electricity, gas, telephone, and others. The process is quite short. For some types of industry, it only takes five working days.

The first step businesses need to take is to apply for certification. Then proceed with the second step, namely data input. Data input is carried out independently through Sistem Informasi Industri Nasional (SIINas).

Furthermore, it is enough to wait for the assessment results and calculation by the institution concerned. To support convenience, the Ministry of Industry provides opportunities for business actors to conduct self-assessments and then report the assessment results through SIINas.

A facility is a form of realization of the government’s PDN spending commitments, BUMN, and BUMD. Ease of issuing certificates supports regional economic growth, and the same applies to large industries but at different stages.

Large industries such as manufacturing and manufacturing require more raw materials. Also, the equipment and implementation systems to the final result are more complicated than in small industries.

Each company can apply for registration to an institution that has been appointed, one of which is PT Sucofindo (Persero)—completing the required documents, including the company’s deed of establishment, company registration certificate, and production report for the last year.

Not only large companies, small businesses also need to verify TKDN. So that it can increase credibility in the eyes of the community and local government, those of you who are still beginners in doing business can immediately apply to the TKDN verification agency.

For more information about inspection and audit services, you can read our article here. If you and your company need further information regarding our services, contact and consult about it here.

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