JAKARTA (Yosefardi) – The government of Indonesia will soon issue the economic stimulus package for business sector this year, to encourage the business players who have been investing in Indonesia and to attract foreign investors to invest in the country, both through direct investment and portfolio investment.
With this stimulus, President Joko “Jokowi” Widodo is optimistic the Indonesian economy to grow by more than 5% this year. Indonesian economy grew by 4.71% in the first quarter of this year, lower than 5.14% in the same period of last year.
The government had launhced some incentives for investors such as tax allowance, eliminating value-added tax for capital goods and lifting income tax for non automotive household products.
Other incentives are the implementation of free visa policy for 30 countries, anti-dumping import duty, boosting biodiesel import and reducing fuel import, the mandatory rupiah policy, the mandatory for letter of credit usage to export main commodities, tightening regulation on the submission of foreign exchange reserves from export earnings, and tax incentives for shipyard industry, agriculture sector, and others.
Meanwhile the business community proposes to the government to;
(1) eliminate value-added tax for commodities
(2) harmonize tariffs
(3) review income tax tariff for coal and mineral exports
(4) soon eliminate value-added tax on imported ship components including its import duty
(5) cancel the increase in royalty payment for coal to IUP holders
(6) integrate the policies of fiscal and monetary, sectoral and regional policies in fishery, forestry, maritime, mining, and processing
(7) make a comprehensive policy package
(8) accelerate award of business permits
(9) apply the free trade agreement with Europe and United States
(10) cut the interest rates.