Govt grants tax holidays to six firms
JAKARTA (JP): The government will grant tax holidays to six out of 19 companies which applied for the facility, State Minister of Investment Sanyoto Sastrowardoyo said here yesterday.
Speaking to journalists after meeting with President Soeharto, Sanyoto said the six companies included three national companies -- consisting of two listed units of the textile producer Texmaco Group: PT Polysindo Eka Perkasa and PT Texmaco Perkasa Engineering and PT Kiani Kertas.
The newly established pulp and paper giant PT Kiani Kertas, controlled by businessman Mohammad "Bob" Hasan, is partly owned by foundations chaired by Soeharto.
The other three businesses that received the income tax holiday -- PT Smelting Copper Co., PT Trans Pacific Petrochemical Indotama and PT Seagate Technology Sumatra -- are Indonesian- foreign joint ventures.
"Up to now, we have received 19 applications for income tax exemptions but only six of them have been completed with comprehensive documents," Sanyoto told journalists.
"The President decided on the tax holidays after he and the three of us -- myself, Coordinating Minister for Production and Distribution Hartarto and Minister/State Secretary Moerdiono, assessed the six applications," Sanyoto added.
Decrees
He said even though Moerdiono was yet to issue government decrees regarding the granting of the tax relief, the tax holiday was effective starting yesterday.
To obtain the tax facility, companies must contribute to economic development through technology, innovations and equity enhancement, Sanyoto said.
Sanyoto said Polysindo and Texmaco Perkasa were exempted from income tax for eight years and five years respectively, Kiani Kertas for 10 years, Smelting Copper for seven years, Trans Pacific for six years and Seagate Technology for nine years.
Polysindo in Karawang, West Java, has invested Rp 650.3 billion (US$216.8 million) in plants to produce polyester chips, polyester filaments, polyester staple fiber, polyester grade and terephthalic acid.
"Its technology innovation and product diversification are among the factors considered for qualifying Polysindo for the tax facility," he added.
Texmaco Perkasa, which operates in Karawang and Kaliwungu, Central Java, manufactures capital goods, especially for the textile industry, such as spinning/weaving machineries. Its strength lies in technology innovation, said Sanyoto.
Kiani Kertas in Berau regency, East Kalimantan, has invested Rp 1.63 trillion in building pulp and paper mills. It is a pioneer in the province's pulp and paper industry and responsible for regional development.
Smelting Copper in Gresik, East Java, with US$715 million investment, is a pioneer in producing copper-cathode using domestic raw materials. It is a joint venture between Mitsubishi Materials Corporation of Japan and PT Freeport Indonesia, which operates a copper mine in Irian Jaya.
Trans Pacific Petrochemical in Tuban, East Java, with $2.3 billion investment, is the country's first integrated olefin and aromatic center.
Trans-Pacific is 10 percent owned by Tirtamas, 60 percent by PT Trans Pacific Petrochemical Ltd. (a Tirtamas affiliate), 20 percent by a subsidiary of Thailand's Siam Cement Public Company Ltd and 10 percent by Japan's Nissho Iwai Corporation. The Tirtamas Group is controlled by businessman Hashim Djojohadikusmo.
Seagate Technology of the United States is located in Medan, North Sumatra. Its $65 million plant is a pioneer in producing electronics components.
Seagate is also the world's largest independent disk drive maker. (rid)