From Government of Indonesia

Incentives for Investment Unveiled

The government aims to boost investment in the country by slashing the approval time for new investments, offering tax incentives, and creating other measures to smooth the path for entrepreneurs, Coordinating Minister for the Economy Boediono said Tuesday (12/6/07).

"These policies are aimed at accelerating the development of the real sector and empowering micro, small and medium enterprises so as to increase the growth of the national economy," Boediono was quoted as saying by Dow Jones Newswires.

The moves follow a new law passed earlier this year to boost investment in Indonesia. The government sees greater investment as vital to achieving its economic growth targets.

Among other measures designed to spur greater investment, the new investment law mandates 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.

The office said in a statement that the government will begin offering income tax incentives to listed companies by August and to other investors by December.

Actual foreign direct investment in the country rose 15% on year to $2.99 billion in the first quarter of 2007, while FDI approvals for the same period increased nearly sixfold to $14.13 billion from $2.36 billion a year before.

The government is also conducting a countrywide assessment of investment regulations, which will be completed this month.
Boediono said the assessment has already found that some policies passed by provincial and regional authorities are hindering investment in certain areas of the country. Once the assessment is complete, the government will ask provincial authorities to review policies it deems non-conducive to investment, he said.

The government will also issue guidelines to better safeguard the rights of taxpayers from violations by taxation officials. Businesses have complained that tax officials are able to detain or prosecute companies or businesspeople without adequate proof that they have violated tax laws.

_________________________
Jawawa.net: Indonesian Business and Investment News Aggregator