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23.
INVESTMENT LAW PASSED
The
House of Representatives on Thursday (29/03) passed the long-awaited
investment law designed to provide various incentives for both local and
foreign investors.
Among the incentives are exemptions or reductions of
income tax, import duties and value-added taxes; accelerated accounting of
asset amortization and depreciation; and exemptions or reductions of land
and building taxes, according to a draft of the law seen by Dow Jones
Newswires. The Finance Department will issue further details on the
incentives, according to the draft.
The new law aims to increase competitiveness in
attracting foreign investment with regional rivals including Singapore,
Thailand and China, Trade Minister Mari Pangestu said after the bill's
approval.
Investment in Indonesia rose 2.9% last year, lower
than the economy's 5.5% growth.
The investment law's passage is one of a series of
policy measures analysts describe as essential to lure foreign investors.
Besides fiscal incentives, the law also provides for
government assistance to some investors in terms of acquiring land,
obtaining visas to Indonesia and securing import licenses.
Government implementation of the law will include
the creation of a "one-stop" investor service facility and the
reduction in the official approval process for investment licenses to 30
days from a current 97 days, Pangestu said.
Pangestu said the law will extend land ownership for
investors to 95 years from a current duration of 60 years and also calls
for the creation of a blacklist of potential investors unwelcome to invest
in Indonesia.
Investments that will qualify for the new incentives
are those that will create "many jobs, investments in industries of
high priority, investment in infrastructure projects, and are located in
remote areas," according to the draft.
Incentives
will also be channeled to investments that bring in new technologies; are
environment-friendly; promote research, development and innovation;
utilize locally produced capital goods and partner with small and medium
businesses. (Menko Perekonomian, 02/04)
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