Govt about to issue new ruling on tax break criteria<\/p>\n
JAKARTA (JP): A presidential decree spelling out criteria for
\ntax breaks for particular investments will be released this month
\nand take effect in January, State Minister of Investment Hamzah
\nHaz said on Monday.<\/p>\n
He said prompt issuance of the decree was important because
\nmany prospective foreign investors were awaiting the ruling and
\ncompetition was intense in the region.<\/p>\n
\"The government has to immediately issue the tax holiday
\ncriteria because of the stiff competition in the Southeast Asian
\nregion to attract foreign investment,\" he told reporters after
\nmeeting President B.J. Habibie.<\/p>\n
The decree will outline general criteria and the specific or
\ntechnical criteria for projects to qualify for the facility,
\nHamzah said.<\/p>\n
He explained that included in the general criteria were
\nemployment opportunities and locational aspects of an investment,
\nwhile specific criteria would include export and import
\nsubstitution benefits.<\/p>\n
Tax breaks for investments outside Java would last for five
\nyears, while tax facilities for projects in Java and Bali would
\nbe for three-year durations.<\/p>\n
Hamzah also said that approved foreign direct investment --
\nnew projects, expansion, and transfer of status -- in the country
\ndropped by 60.65 percent during this year's January-Dec. 15
\nperiod to US$13.31 billion from $33.83 billion in the same period
\nin 1997.<\/p>\n
He added that the number of foreign direct investment projects
\nrose to 979 during the period from 785 in the same period last
\nyear.<\/p>\n
The government approved 308 domestic investment projects worth
\nRp 59.41 trillion ($7.9 billion), compared to 717 projects worth
\nRp 119.87 trillion last year, Hamzah said.<\/p>\n
Investments<\/p>\n
The inflow of foreign investments is seen as one of the key
\nfactors to help lift the country out of its economic crisis.<\/p>\n
The ongoing social unrest is a major discouragement to foreign
\ninvestment, especially as Thailand and South Korea are considered
\nbetter choices due to their stability and quickened pace of
\neconomic recovery.<\/p>\n
Hamzah explained that the government had to cancel tax breaks
\ngiven to 10 companies following the public uproar over
\nallegations that similar facilities for six companies were based
\non collusion and nepotism.<\/p>\n
Among the companies granted special tax breaks in 1997 were PT
\nKiani Kertas, PT Smelting Copper Co., PT Trans Pacific
\nPetrochemical Indotama, PT Seagate Technology Sumatra, PT
\nPolysindo Eka Perkasa and PT Texmaco Perkasa Engineering.<\/p>\n
Pulp and paper giant Kiani, controlled by former president
\nSoeharto's close associate Mohamad \"Bob\" Hasan, was given a 10-
\nyear income tax exemption because of its key role in developing
\nEast Kalimantan where the company is located.<\/p>\n
Trans-Pacific, controlled by well-connected businessman Hashim
\nDjojohadikusumo, received six-year tax break because it was the
\ncountry's first integrated olefin and aromatic center.<\/p>\n
Seagate received a nine-year tax holiday because of its
\npioneering role in producing electronic components.<\/p>\n
Textile-related industries Polysindo and Texmaco, controlled
\nby the Texmaco Group, were exempted from income taxes for eight
\nyears and five years respectively because of their technology
\nGovt about to issue new ruling on tax break criteriainnovation
\nand export-oriented operations. (rei\/prb)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-about-to-issue-new-ruling-on-tax-break-criteria-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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