Tax facility extended

Tax facility extended

JAKARTA (JP): The government has given a three-year extension
to a tax facility granted to both domestic and foreign investors
in a bid to attract more investment.

The Investment Coordinating Board (BKPM)'s deputy chairman for
industry assessment and licensing, Wardijasa, said yesterday that
the facility was supposed to expire on March 31 but has now been
extended until March 31, 1998.

"We need to extend this facility because we do not offer tax
holidays to investors like some other countries do," Wardijasa
said.

Under decree No. 327/A.1/1996, signed by BKPM Chairman Sanyoto
Sastrowardoyo on April 1, both domestic and foreign investors who
acquire investment licenses prior to March 1998 can postpone
value added tax and luxury tax payments on the imports of capital
goods for three years from the time they acquired their licenses.

"This facility is to encourage investors to realize their
investment commitments," Wardijasa said.

The current rate of realization for foreign investment is only
50 percent, while domestic investment realization is much lower.
(rid)