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Indonesia offers tax reduction to investors at special economic zones

Xinhua, November 5, 2015 Adjust font size:

Indonesia would provide tax reduction facilities by up to 25 years at special economic zones, a move aims at luring investment in the Southeast Asia's largest economy, a minister said here on Thursday.

The policy is the sixth of huge economic stimulus packages, which have been issued since September as the country scrambles to attract foreign capitals and revive subdued economic growth.

Chief Economic Minister Darmin Nasution said that the government expanded the special economic zones by setting up 6 more areas, bringing the total to 8 in the vast archipelago country.

For the business activities with investment of more than 1 trillion rupiah (some 735.13 million U.S. dollars) and using raw material of main local resources, the tax reduction will be given by 20 to 100 percent for 10 to 25 years, Mr. Nasution said.

For the business activities with investment 500 billion rupiah (about 367.56 million U.S. dollars) rupiah to 1 trillion rupiah (some 735.13 million U.S. dollars), the 20 to 100 percent tax reduction will be given from 5 to 15 years, he said.

But, for the business activities not using the main local resources, they will be given tax allowance or tax reduction of 30 percent for 6 years, Minister Nasution said.

"The aim of this policy is to give certainty and stimulation for the investment," Mr. Nasution said at the State Palace.

On property ownership, the minister said that the government will also permit foreigners to have property at the special economic zones, and companies in the zones will be able to ship raw materials from overseas with no value-added tax.

Importation of raw material for medicine or medicine can be fully carried out by online system with less than one hour, he said.

Indonesia economy started to picked up at 4.73 percent at the third quarter from 4.67 percent and 4.71 percent at the second and the first three months, the national statistic bureau announced on Thursday. Endit