Indonesia to provide incentives for export-oriented investors


In a bid to further control capital outflow out of the country, Indonesia would issue a policy that provides incentives for investors whose products are designated for export, a minister said here on Tuesday.

“The (would-be implemented) policy was aimed at encouraging investors to re-invest their profits here, not bringing it to countries elsewhere. Let’s say if the tax now set at 20 percent, it would eventually be reduced to approximately zero percent,” Indonesian Finance Minister Chatib Basri said.

The minister added that the policy is now still being processed by fiscal policy section in his ministry. It can be implemented within the next two months.

He said that such a policy would also be expected to help improve the country’s exchange value against U.S. dollars. The exchange value of Indonesia’s currency Rupiah now has dropped to above 12,000 per one U.S. dollars from 9,500 set in the state budget.

Indonesia recorded total new investments at 398.6 trillion rupiah (about 33 billion U.S. dollars) last year, surpassing the target initially set at 390 trillion rupiah (about 32.9 billion U. S. dollars).

Of that figure, foreign investments contributed the most at 270. 4 trillion rupiah (about 22.4 billion U.S. dollars), followed by domestic ones at 127.6 trillion rupiah (about 10.5 billion U.S. dollars).

Indonesia’s Investment Coordination Agency (BKPM) has increased investment target for this year up to 506 trillion rupiah (about 42 billion U.S. dollars).

Source : Xinhua | February 4, 2014


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