Government to provide more incentives to boost investment
Government to provide more incentives to boost investment
JAKARTA (JP): The government is to provide more incentives for
investors in a bid to boost new investment projects this year, it
was revealed yesterday.
State Minister of Investment Sanyoto Sastrowardoyo said that
offering new incentives was increasingly important to give a
breathing space for private companies severely hit by the ongoing
economic turmoil.
He declined, however, to give more details."The President
advised me not to publicize this policy before consulting with my
colleagues," he said after meeting with President Soeharto at his
residence on Jl. Cendana, Central Jakarta.
Sanyoto said that the value of foreign investment approvals
would probably not exceed US$20 billion this year without special
incentives.
The minister noted that the total amount of foreign investment
in the last four years averaged about $32 billion.
In the first quarter of this year the government approved 307
foreign direct investment projects worth $5.2 billion, Sanyoto
said. This compares with 211 projects worth $6.5 billion in the
same period last year.
The situation is more gloomy in the domestic investment
sector; in the first quarter domestic investment approval totaled
Rp 17.8 trillion ($2.08 billion) for 94 projects, compared to Rp
36.9 trillion during last year's first quarter, he said.
"The impact of the crisis is more strongly felt in the
domestic investment sector," Sanyoto noted.
According to Sanyoto, the foreign investments include two
projects worth $1.5 billion for electricity, gas and drinking
water; housing construction on industrial estates (three projects
worth $761 million); the chemical industry (21 worth $734
million), crops (nine worth $433 million); metal products (49
worth $434 million); and hotels and restaurants (11 worth $357
million).
Sanyoto also disclosed that the President would soon grant tax
holiday facilities to 10 out of 20 companies that applied for the
incentives.
"Most of them are domestic companies, and only two of them are
foreign firms," said Sanyoto without further explanation.
In August last year, the President granted income tax
exemptions to six out of 19 applicants.
To obtain the tax facilities, companies must contribute to
economic development through technology, innovations and equity
enhancement, Sanyoto said last year.
Despite the current economic turmoil, Sanyoto said he remained
confident that foreign investors still see Indonesia as an
attractive site for investment.
"The opinions of multinational companies remain unchanged,"
Sanyoto said, citing the result of a recent survey conducted by
international agencies on Indonesia and Southeast Asia. (prb)