Government mulls new tax breaks to lure foreign investors

Government mulls new tax breaks to lure foreign investors

JAKARTA (JP): State Minister of Investment/Chairman of the
Investment Coordinating Board (BKPM) Marzuki Usman said on
Thursday his office was considering devising a more attractive
tax incentive package to woo foreign investors back to the
country.

"We hope the package proposal will be completed before the
People's Consultative Assembly convenes its General Assembly
(scheduled in November)," he was quoted by Antara as saying.

He did not give further details but said the proposal would be
discussed in a Cabinet meeting next month.

The board will first evaluate similar incentive schemes in
other countries, such as China and Singapore, before determining
the level of tax incentives appropriate here, Marzuki said.

The scope of the incentives could be determined according to
the location and sector of investment ventures, he noted.

Procedures for investment would be expedited by authorizing
provincial investment offices (BKPMD) to license most investment
projects, he added.

"A decree on this decentralization of authority is expected to
be signed by the President soon," he said.

As part of the incentives to draw wary foreign investors, the
government also is considering allowing foreigners with total
investment of at least $1 million to obtain permanent resident
status, which would free them from the need for a visa to enter
the country.

Foreign investors often complain to BKPM about the complicated
procedures involved in obtaining a visa or entry permit to
Indonesia.

Marzuki said attractive benefits and simplified investment
licensing procedures were important to stimulate foreign
investment.

He noted that foreign investment was sorely needed to help
accelerate economic recovery and generate jobs to the millions
still unemployed and those laid off from the impact of the more
than two-year-long economic crisis.

BKPM has said new foreign investment approval fell sharply due
to the political uncertainty and the huge foreign debt overhang
of both the government and the private sector. (cst)