Batam retains its tax status<\/p>\n
JAKARTA (JP): The government said on Monday it had postponed
\nuntil next year the implementation of value added taxes and
\nluxury sales taxes on Batam, pending the issuance of a free trade
\nzone law currently planned for the island.<\/p>\n
Director general for taxes, Machfud Sidik, said the decision
\ncame after the government considered giving Batam free trade
\nstatus.<\/p>\n
\"To avoid any confusion while waiting for the free trade zone
\nlaw, we have postponed the implementation of value added tax and
\nluxury tax in Batam until next year,\" Machfud told reporters
\nfollowing a post Idul Fitri gathering.<\/p>\n
To raise this year's tax revenue base, the government had
\nplanned to revoke Batam's industrial bonded zone status and start
\ncollecting value added taxes on the island as of January.<\/p>\n
But foreign investors and residents on Batam protested against
\nthe plan saying that it would harm the island's business climate.<\/p>\n
Batam has become an attractive industrial estate for foreign
\ninvestors who mainly come from neighboring Singapore.<\/p>\n
Machfud said that the Ministry of Industry and Trade was
\ndrafting the free trade zone bill, under which it proposed to
\nchange Batam's status to a free trade zone.<\/p>\n
\"This proposal has the House's political support with an
\nofficial letter from the House speaker to the President,\" he
\nsaid.<\/p>\n
Other regions in consideration for free trade status include,
\namong others, Bitung in North Sulawesi, Morotai in Maluku and
\nBiak in Irian Jaya.<\/p>\n
The government last month declared Sabang in Aceh as a free
\ntrade zone.<\/p>\n
In Batam, the government would lose between Rp 300 billion
\n(US$31.5 million) and Rp 400 billion per year in potential tax
\nrevenue if Batam was declared a free-trade zone in the future,
\nMachfud said.<\/p>\n
He noted, however, that the free-trade zone status would boost
\ninvestment in Batam and help spur the country's economic
\nrecovery. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/batam-retains-its-tax-status-1447893297",
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"sponsor": "Okusi Associates",
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