Purbaya Assures Bali Financial SEZ Will Not Become a Tax Haven

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa has confirmed that plans for establishing a Special Economic Zone (SEZ) in the financial sector in Bali will not turn the area into a tax haven.

The term tax haven refers to countries around the world that offer low tax rates, even up to 0%, to attract foreign companies to store their money there, while providing guarantees of confidentiality for the stored assets.

According to him, the concept being prepared is instead directed towards strengthening sources of national development financing.

Purbaya explained that the zone will resemble international financial centres such as the Dubai Financial Centre (DIFC) in Dubai, United Arab Emirates. The area will have specific legal rules or common law to support global financial activities.

“What we are creating is like in Dubai, which spans 100 hectares or a bit more or less. That makes it a special economic zone. There, specific legal common law will apply,” Purbaya stated during a press conference of the Financial System Stability Committee, quoted on Friday (8/5/2026).

Furthermore, Purbaya explained that funds from abroad entering the zone will indeed not be immediately taxed. However, this policy is aimed at attracting foreign capital flows into Indonesia to be channelled into various domestic investment instruments.

“Money entering there can be used to invest in many Danantara projects with good returns. Or in projects outside the economic zone with promising prospects,” he said.

According to him, this scheme will actually expand the base of development financing, both for the private sector and the government. Investors in the zone will also be allowed to purchase government bonds, thereby strengthening Indonesia’s investor base.

“For me, they can also invest in bonds or my government debt securities. So my buyers will increase. This will make the sources of development financing stronger for both the private sector and the government,” he added.

Purbaya emphasised that tax incentives will only apply while the funds are in the financial centre. When capital begins to be invested in the real sector outside the zone, the resulting economic activities will generate state revenues through taxes and other instruments.

“As long as it’s in the financial centre, for example, if they ask for tax incentives, I’ll give them. It’s fine; previously there was nothing there, but when it comes out, there will be results, there will be taxes and so on, and the economy will run,” he said.