BKPM chief: Govt Regulation No 1/2007 to be revised soon

Jakarta (Antara News) - The head of the Investment Coordinating Agency (BKPM) M.Lutfi said the government will soon revise Government Regulation No 1 of 2007 on income tax facility for capital investment in certain lines of business or regions in Indonesia so that investors would enjoy the benefits of their investment in the shortest possible time.

"(Revision will be carried out) as soon as possible, " he told a hearing with commission VI of the House of Representatives (DPR) in Jakarta on Tuesday.

Under the facility, the government will give a 30 percent income tax cut in stages in six years to investors who fulfilled the requirements.

According to Lutfi, there is still a different of view between BKPM and the Directorate General of Taxation which still posed an obstacle to the implementation of the Government Regulation.

BKPM said the facility applies to all business companies which had not start operating by January 1, 2007, but the Taxation Directorate General said the facility applies to companies who had secured an in-principle investment permit (SP BKPM) after January 2007.

"We have yet to agree on the procedures of application for the facility. The matter will be discussed further by the export and investment promotion national team," he said.

Lutfi said that if the facility is applicable only to holders of SP BKPM issued on January 1 2007, the facility could be enjoyed not earlier than after a factory is operational.

Up till now, Lutfi said, the facility applies only to 17 companies with a total investment of 7 billion US dollars on the basis of 15 sectors covered by Government Regulation no 1/2007.

The 15 certain type industrial enterprises are the food industry, textile industry, garment industry, pulp industry, paper industry, carboard industry, chemical industry, rubber and rubber goods industry, porcelain products industry, iron and steel industry, non-ferrous base metal industry, machinery industry, electric motor, generator, and transformer industry, electronic and telemathic industry, land transport industry, ship building and repair industry, and non-ferrous metal products industry.(*)
Jawawa.net: Indonesian Business and Investment News Aggregator