The Chronicles of a Capitalist Lawyer

At last, the long awaited draft amendment to the VAT law has been passed by the Indonesian legislative board (the " New VAT Law "). You can see the soft copy here . The law will be effective as of 1 April 2010. The most important thing here is the fact that the New VAT Law recognizes the existence of Islamic finance and exempts VAT for transactions that fall under the term of Islamic finance. Article 1A Paragraph (1) h of the New VAT Law states that with respect to delivery of taxable goods by taxable entrepreneur in the context of Islamic financing activities, such delivery shall be only considered between the taxable entrepreneur and the party needing such taxable goods. While the elucidation of this Article does not provide specific explanation, it gives an example of a murabahah transaction for a vehicle financing, where an Islamic bank buys a car from a taxable entrepreneur based on an order from the Islamic bank customer. In this example, the New VAT Law acknowledges t

Please see here . This is the first time I am mentioned in a footnote. While there is nothing extraordinary with this, I am happy and appreciate the writer for using one of my articles (written with my partner) as a source of reference for his paper. There are still many things to come from the Capitalist Lawyer, and I'm planning to make all of those things happen.

Today is my 26th birthday, so in this special day, instead of writing and analyzing things, let me tell you some of my wishes and random thoughts on my most beloved subjects, law and lawyers. Enjoy! I believe that laws should be made by professionals not some common people, i.e. the parliament, and I wish that we could achieve that as soon as possible. Of course, the process of recruiting those professionals should be made as democratic and transparent as possible. If not, then we would only have another despotic government. I wish to have a virtual data base that has complete legal references and sources which have been systematically organized and all I need to do to find them is by one click. That would be glorious. I wish that I could have more time in learning all the new things about law. Law is a never ending process, continuously evolving in order to achieve perfection. It is really frustrating that I can't follow all of those new developments. Being a lawyer requires

If I could only complain one thing on the process of doing an initial public offering of shares in Indonesia, that must be the requirement for a proposed listed company to obtain from its creditors a waiver of any restriction on such company's capacity to pay dividends to its shareholders or any restriction of dividends payment on the subsidiaries level, provided that the proposed listed company income depends on the payment of dividends from its subsidiaries. You will be amazed to know that this is not based on a strict regulation, rather it came from an unwritten policy of the Indonesian Capital Market and Financial Institution Supervisory Agency (" Bapepam-LK "). According to Bapepam-LK officials, when a company is trying to raise funds from the public, such company should be able to pay dividends to its shareholders since such dividends will become the main source of income for its shareholders. Therefore, any restrictions for dividend payment should be eliminated

In the third and also the last part of my article, we will discuss the actual implementation of Kelsen's theory of law and why such theory matters. If you have read all of my previous related posts and you are still reading this post, I must first congratulate you for your persistence and patience. I hope this article would be useful to help you in understanding the basic characteristics of the law.  The Validity of Law and the Problem of Bad Laws  In my opinion, the most important contribution of Kelsen's theory is the theory that the validity of the laws does not depend on their contents or the values represented by those contents but on: (i) how they were established (i.e. whether they were made based on a correct mechanism set out by higher norms), and (ii) the validity of the higher level's norms which enable those laws to be created. What are the implications? No matter how bad a law is drafted or no matter how ridiculous a law is, as long as the above requirements h

I can't stop laughing with this great piece of article from Greg Mankiw. Sigh, if only the Nobel Committee also gives Nobel Prize in laws, I should also be able to make this parody, hahaha. Anyway, it's a very good parody which questions why Obama is named as the winner of the Nobel Peace Prize. Enjoy, and don't forget to see the link in his post.

Here is a very concise article about the role of the Government. A must read for those who would like to understand policies differences between the "big" and "small" government. I can understand why most people will be in favor of the "big" government" during the term of crisis. We love saviors aren't we? For most of us, those smart looking officials seem to have all what it takes to save the country (and ahem, I'm not referring to the officials of my country). Well, you better think again. I agree that the government must have a role in the development of a country, or else why we need to have a government in the first place? But we must also acknowledge the limitations of the government. They are, after all, made from the people and they definitely could not know and understand everything, including the entire risks and benefits of their policies. A good government should know when to stop making policies to avoid over regulation which

In the first part of my article, we have discussed the basic concepts of Hans Kelsen's Pure Theory of Law. In this second part, we will discuss the concept of Norms, and the relationship between efficacy and validity of the law. Norms, the Hierarchy of Norms, and the Basic Norm   A discussion on Kelsen's theory of law wouldn't be complete without discussing the Norms. As I've said previously, according to Kelsen, the law can be viewed as a specific social technique and as a norm. What is a norm? Kelsen describes norm as a rule expressing the fact that somebody ought to act in a certain way, without implying that "anybody" really wants the person to act that way. Further, Kelsen also defines norm as an impersonal and anonymous command (this is made by Kelsen to counter argue John Austin 's definition of law, i.e. law as a command from a sovereign).  From his definition, we can conclude three important concepts: (i) a norm is a rule that provide certain &

Natural disasters are without a doubt a powerful force in this world. They destroy many lives and cause great losses not only to a particular area but also a nation as a whole. However, the fact that most people do not learn from the various occurrence of these disasters truly enrages me. Well, saying that people haven't learned anything might be exaggerating, they did learned something, but not in the right thing as we shall see further below. In Indonesia, whenever a disaster occurs, what would be the first thing to expect by us to see? Yes, statements that the disaster came because of God's wrath. The fact that some of the biggest disasters occurred in areas inhabited mostly by moslems also supports the claim that the disasters are actually a form of punishment from God because Indonesian moslems have not lived in accordance with God's laws or the Shari'a (maybe these people forget that moslems are indeed the majority of Indonesian citizens and therefore they are al