Batam exempt from VAT, luxury taxes<\/p>\n
JAKARTA (JP): President B.J. Habibie will exempt Batam island
\nin the Riau archipelago from value added and luxury taxes in a
\nbid to boost investment in the special industrial zone, an
\nofficial said yesterday.<\/p>\n
Ismeth Abdullah, head of Batam Development Authority, told
\njournalists after reporting to President B.J. Habibie that the
\nplanned tax exemptions were intended to help turn Batam island
\ninto a more attractive industrial site for investors.<\/p>\n
"It has now been agreed to abolish value added and luxury
\ntaxes so that the island can become a true industrial zone," he
\nadded.<\/p>\n
Ismeth said the reintroduction of value added and luxury taxes
\nby the finance minister in March had made locating on Batam
\nisland a much less attractive proposition for foreign investors.<\/p>\n
He said the island, which is located 15 kilometers south of
\nSingapore, earned the nation US$4.5 billion in foreign exchange
\nlast year and employed a workforce of 135,000 people.<\/p>\n
Ismeth recently replaced Jusuf Effendi Habibie, a brother of
\nPresident B.J. Habibie, as head of the Batam Development
\nAuthority. J.E. Habibie resigned from the post soon after his
\nbrother became president. B.J. Habibie himself is a former head
\nof the Batam Development Authority.<\/p>\n
Meanwhile, State Minister of Investment Hamzah Haz revealed on
\nTuesday that his office had cut some of the bureaucratic
\nprocedures that foreign investors must go through to invest in
\nIndonesia.<\/p>\n
Foreign investors, he said, are no longer required to get a
\nprincipal license from the governor of the province in which they
\nplan to locate.<\/p>\n
Furthermore, investors will no longer be forced to locate in
\ndesignated industrial estates. From now on they are free to
\nchoose where to build their plants.<\/p>\n
He added that investors were no longer required to get a
\nletter of recommendation from the directorate general which
\nsupervises the sector in which they operate.<\/p>\n
And most importantly, Hamzah Haz said, the government would
\ngrant 10 year tax holidays to foreign investments which met
\ncertain criteria.<\/p>\n
The minister also said he had devolved responsibility for
\nlicensing and offering incentives to attract domestic investments
\nto provincial governors and provincial offices of the Investment
\nCoordination Board (BKPM).<\/p>\n
"All governors must have business awareness so that they can
\nattract as many investors as possible to their provinces to
\nimprove their people's welfare," he was quoted by Antara as
\nhaving said in Medan, North Sumatra.<\/p>\n
The minister called on all governors and provincial
\nrepresentatives of BKPM to monitor the implementation of
\ninvestments which they licensed. (prb\/rid)<\/p>",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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