Jakarta, Nov 10 (Antara) - The government announced its sixth economic policy package on Thursday, last week, focusing on the development of Special Economic Zones (SEZs), water exploitation, and implementation of the National Single Window Service (INSW).
The policy on incentives for investors is aimed at reinvigorating the economy of the country's rural areas through the SEZ development scheme.
"Based on this package, the government has designated eight areas as SEZs to develop the local resources," Chief Economic Minister Darmin Nasution stated while announcing chapter six of the government's economic policy package during a press conference at the Presidential Office in Jakarta on Thursday (November 5).
National Development Planning Minister Djalil had earlier noted that the government, through the policy, will provide income tax incentives, licensing facilities, easy license extension, immigration incentives, and import tax incentives for investors in SEZs.
On tax incentives, Djalil remarked that the government will provide income tax cuts. However, he did not reveal the percentage of cuts on income tax as well as on the time frame for the tax holiday facilities.
He said the tax holiday facilities can be given for a time frame of 25 years, with a tax cut in the range between 20 percent and 100 percent.
"Details about this are still being discussed. It can be between 20 percent and 100 percent. The tax holiday time frame can be between five to 20 years. We will see the main purpose of the investors," Djalil affirmed.
The facilities will be provided for investors in the eight SEZs designated by the government.
The eight areas designated under the government regulation are Tanjung Lesung in Banten, Sei Mangkei in North Sumatera, Palu in Central Sualwesi, Bitung in North Sulawesi, Mandalika in West Nusa Tenggara, Morotai in North Maluku, Tanjung Api-Api in South Sumatra and Maloi Batuta Trans Kalimantan in East Kalimantan.
"Currently, there are only two SEZs, whose operations were announced by President Joko Widodo, earlier this year. The remaining ones are still under construction," Minister Darmin said.
According to him, the issuance of the policy is expected to provide certainty and attract investors through the adoption of a government regulation on the facility and easiness of doing business in the SEZs.
Darmin said the issuance of the government regulation is not merely making the SEZs a zone with various incentives, but also as an area, which encourages the development of locally sourced industrial clusters in the SEZ locations.
The policy also encourages the integration of efforts by the regional and central governments to create a good investment climate. He said the implementation of the government regulation will be effective if the local government has the commitment to provide the needed facilities.
Matters regulated in the draft government regulation cover the type and amount of fiscal incentives and various other facilities in the manpower sector, immigration, land and licensing services.
Investment in the production chain, which is the focus of the SEZ, will also get bigger incentives than the incentives for investment, which is not the focus of the SEZs.
The second sector included in chapter six of the government's policy package concerned a government regulation on the drinking water supply business (SPAM) and on the exploitation of water resources.
The background of this policy is related to the decision of the Constitutional Court (MK), which annulled Law No. 7 of 2004 on Water Resources. In order to fill the legal void resulting from the annulment of Law No.7 of 2004, the MK allowed the reinstatement of Law No. 11 of 1974 on Irrigation, with certain conditions.
The conditions are: the exploitation of water should not disturb, ignore, and eliminate the people's rights to water; the state should meet the people's right to water; the sustainability of the environment as one of the people's rights; supervision and control of water are a must; and priority for the exploitation of water is given to state-owned/regional government-owned companies (BUMN/BUMD), among others.
If all these conditions are met and water sources are still available, the government will be able to grant licenses to private companies to exploit the water resources under certain stringent requirements.
According to Minister Djalil, the policy aims to provide a legal umbrella for investors who have made their investments earlier when the Law on Water Resources was still in force.
"The substance is to provide a transitional period and to focus on existing water supply companies to prevent the emergence of legal problems later on," he clarified.
The third sector covered by the sixth installment of the government's economic policy package announced on Thursday concerned the implementation of the INSW.
It simplifies licensing procedures under the Food and Drug Supervisory Board (BPOM).
According to Chief Economic Minister Darmin Nasution, the BPOM has simplified its procedures and integrated them into custom licensing and goods clearance, so that it will accelerate the flow of foods and medicines.
"It will all be implemented online, so that the processes will be handled speedily. It will affect other related agencies, including the agency that handles the storage time, so that all will be quick," Minister Nasution remarked.
The policy aims to guarantee consumption security along with quality and price affordability of food and drugs. It also aims to boost the industry and the export of food and drug products through service and supervision of raw material procurement.***3***
(A014/INE/O001)EDITED BY INE(T.A014/A/BESSR/O. Tamindael) 10-11-2015 11:39: |
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