Batam investors ask for tax relief

Batam investors ask for tax relief

The Jakarta Post, Jakarta

Hundreds of foreign companies with interests on Batam island
in Riau province have asked for tax relief, creating anxiety
among island authorities who worry that they will not be able to
reach tax revenue targets this year.

The foreign companies have applied for tax relief following a
slump in the electronics market in the United States, the largest
buyer of electronic goods from the island, Antara news agency
quoted the Batam Island Authority officials as saying.

Since the economic slowdown hit major economies five months
ago, more than 5,000 workers employed in the electronics industry
have lost their jobs.

The news agency quoted industry players as saying that the
agency's plan to raise the monthly regional minimum wage to Rp
700,000 (US$70) from Rp 510,000 per month would force many
foreign companies to shut down their activities and leave Batam.

The local authorities have projected tax receipts in 2001 at
Rp 1 trillion.

To date, there are 515 foreign companies operating in Batam.

Aside from the request for tax relief, the Batam Island
Authority was also concerned over a recent report that about 140
foreign companies had evaded their formal tax obligations for
many years.

Head of the island's tax office Djangkung Soedjarwadi said his
office was auditing the 140 companies and would take them to
court.