Govt vows to decide on Batam FTZ soon<\/p>\n
Zakki P. Hakim, The Jakarta Post\/Jakarta<\/p>\n
The government is committed to quickly decide on whether to turn
\nthe whole of Batam island into a free trade zone (FTZ), or only
\npart of it under an enclave system.<\/p>\n
Minister of Trade Mari E. Pangestu said that the government
\nwas determined to make a decision soon, as delaying would only
\nhamper the flow of investment.<\/p>\n
\"I can't promise you that there will be a decision in 100
\ndays, but I can say that the process will begin within this next
\n100 days,\" she told lawmakers late on Thursday during a hearing
\nwith the House of Representatives Commission VI on trade,
\ninvestment and industry.<\/p>\n
Mari said that the two main problems in deciding the FTZ
\nstatus of Batam were the issues of smuggling and fairness, as
\nconsumers within the FTZ would be exempted from paying value
\nadded tax.<\/p>\n
The previous government proposed an enclave system whereby
\nonly certain industrial areas would get the FTZ status, arguing
\nthat turning the whole of Batam into a FTZ would be risky amid
\nrampant smuggling practices, and would also encourage people in
\nother regions to demand similar tax treatment.<\/p>\n
Meanwhile, previous members of the House have insisted that
\nthe whole of Batam should be turned into an FTZ to lure more
\nforeign investment.<\/p>\n
The government needs to issue a law on the FTZ status of Batam
\nto create certainty for investors, but this will require approval
\nof the House.<\/p>\n
Batam, which is located very close to Singapore, is now one of
\nthe most attractive manufacturing and industrial locations in the
\nSoutheast Asian region, playing host to some 600 foreign
\ncompanies and absorbing over US$3 billion in foreign investment.<\/p>\n
Meanwhile, Indonesian Chamber of Commerce and Industry (Kadin)
\nchairman MS Hidayat said that whether to turn the whole of Batam
\ninto a FTZ area, or to adopt the enclave FTZ approach, was not
\nan issue for investors as what was most important was that the
\nstatus of Batam be clearly defined.<\/p>\n
\"The Kadin local representative (in Batam) told me that there
\nare about 250 parties that have expressed interest in investing
\nin Batam, but postponed their decisions until there is a clear
\ndecision on Batam's future,\" Hidayat said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-vows-to-decide-on-batam-ftz-soon-1447893297",
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