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Ada Pertanyaan? Hubungi Kami Marcell Sihombing, Fitri N. Heriani
The Ministry of Industry. Photo: kemenperin.go.id
With the government’s broad policy of expanding Indonesia’s industrial zones beyond the relatively limited confines of Java in mind, the Ministry of Industry (Ministry) is currently focusing its energies on formulating a draft government regulation on industrial areas (Draft Regulation). The Draft Regulation is aiming to improve and update Government Regulation No. 24 of 2009, which currently regulates issues relating to industrial areas.
Imam Haryono, the Director General of Industrial-Area Development at the Ministry, has revealed that the Draft Regulation, which is currently under deliberation, is aiming to attract investors to areas all over the country. This aim is to be realized through the expansion and development of industrial areas across the entire nation.
“The Draft Regulation is intended to spread investment across Indonesian soil and represents something of a breakthrough,” stated Mr. Haryono at a discussion held at the Indonesian Investment Coordinating Board’s (BKPM) Jakarta headquarters on 2 November 2015.
In order to achieve this goal of expanding and developing industrial areas throughout the country, the government is planning to implement a multi-tiered system of fiscal incentives. Indonesia’s 34 provinces are to be divided up into ten groups, which are to be further categorized into four industrial-development areas (wilayah pengembangan industry - WPI).
These four areas will comprise of Developed WPI, Developing WPI, WPI Potential 1, and WPI Potential 2. By way of example, the provinces of Papua and West Papua are categorized as WPI Potential 2, because they possess the highest potential, both in terms of the size of any prospective industrial developments and their potential longevity.
Mr. Haryono is hopeful that the Draft Regulation will be able to effectively create new development areas outside of the relatively small island of Java, and that these zones will become the nation’s new symbol of progress, growth and connectivity.
Mr. Haryono further revealed that the Draft Regulation would grant certain facilities to investors willing to invest in any WIP. Firstly, such investors will be able to enjoy financial facilities in form of tax incentives, such as corporate income-tax breaks, ease of customs processing, and reduced value-added tax (VAT). Secondly, non-fiscal facilities such as industrial infrastructure, primary industries and supporting industries are to be provided by local governments. And finally, the Draft Regulation recentralizes local-government authority to grant relief, reductions, or exemptions from various taxes and retributions, such as land and building title transfer fees (BPHTB), land and building tax (PBB), and sales and purchase agreements (PPJB).
Additionally, the Draft Regulation will also offer other incentives to potential investors, including a three-hour investment processing program and exemption from the obligation to secure an environmental impact analysis (AMDAL) license or a disturbance permit. By way of explanation, Mr. Haryono pointed to the disturbance permit.
“An industry that is established via the correct procedures will, of course, be located in an industrial area in which there are currently no residential settlements, therefore there will be no need for any disturbance or AMDAL permits,” elucidated Mr. Haryono.
Tamba Hutapea, Deputy at the BKPM’s Capital Investment Planning Division, concurred with Mr. Haryono, explaining that investors will be able to begin construction in the relevant industrial area immediately after the three-hour investment processing procedure has been completed. This is because industrial areas are created in a way that already takes into consideration the placement of factories and AMDAL. Disturbance/AMDAL permits have thus been deemed unnecessary.
“If an industry is located within the boundaries of an industrial area, then construction can begin straight away, even as the various required licenses and permits are being processed. The investment value is of no concern, and immediate construction is allowed,” stated Mr. Hutapea firmly.
The Draft Regulation is planned to come into force by the end of this November. According to Mr. Haryono, the Draft Regulation was originally supposed to come into effect at the end of October, however it contains many inconsistencies which are currently being ironed out, especially in relation to regulations that pertain at a regional level.
The intention, however, is to prioritize and push through the Draft Regulation, and with this in mind, the Ministry is currently coordinating with the Ministry of Domestic Affairs, which directly regulates local government.
“Many contradictory regulations still exist at the regional level. Therefore, we [the Ministry] are continually coordinating with our colleagues from the Ministry of Domestic Affairs. We [the Ministry] only offer suggestions relating to all matters that fall under the control of the Ministry of Domestic Affairs and industrial policy, and then leave it to their discretion.” asserted Mr. Haryono.
Mr. Hutapea expressed his agreement with Mr. Haryono and asserted that the full support of local governments was essential as regards the implementation of industrial-area policy, as new industrial zones would be spread across Indonesia’s various regions.
“Without the support of local governments, then this policy is guaranteed to fail,” concluded Mr. Hutapea.
(sp)
Marcell Sihombing, Fitri N. Heriani
The Ministry of Industry. Photo: kemenperin.go.id
With the government’s broad policy of expanding Indonesia’s industrial zones beyond the relatively limited confines of Java in mind, the Ministry of Industry (Ministry) is currently focusing its energies on formulating a draft government regulation on industrial areas (Draft Regulation). The Draft Regulation is aiming to improve and update Government Regulation No. 24 of 2009, which currently regulates issues relating to industrial areas.
Imam Haryono, the Director General of Industrial-Area Development at the Ministry, has revealed that the Draft Regulation, which is currently under deliberation, is aiming to attract investors to areas all over the country. This aim is to be realized through the expansion and development of industrial areas across the entire nation.
“The Draft Regulation is intended to spread investment across Indonesian soil and represents something of a breakthrough,” stated Mr. Haryono at a discussion held at the Indonesian Investment Coordinating Board’s (BKPM) Jakarta headquarters on 2 November 2015.
In order to achieve this goal of expanding and developing industrial areas throughout the country, the government is planning to implement a multi-tiered system of fiscal incentives. Indonesia’s 34 provinces are to be divided up into ten groups, which are to be further categorized into four industrial-development areas (wilayah pengembangan industry - WPI).
These four areas will comprise of Developed WPI, Developing WPI, WPI Potential 1, and WPI Potential 2. By way of example, the provinces of Papua and West Papua are categorized as WPI Potential 2, because they possess the highest potential, both in terms of the size of any prospective industrial developments and their potential longevity.
Mr. Haryono is hopeful that the Draft Regulation will be able to effectively create new development areas outside of the relatively small island of Java, and that these zones will become the nation’s new symbol of progress, growth and connectivity.
Mr. Haryono further revealed that the Draft Regulation would grant certain facilities to investors willing to invest in any WIP. Firstly, such investors will be able to enjoy financial facilities in form of tax incentives, such as corporate income-tax breaks, ease of customs processing, and reduced value-added tax (VAT). Secondly, non-fiscal facilities such as industrial infrastructure, primary industries and supporting industries are to be provided by local governments. And finally, the Draft Regulation recentralizes local-government authority to grant relief, reductions, or exemptions from various taxes and retributions, such as land and building title transfer fees (BPHTB), land and building tax (PBB), and sales and purchase agreements (PPJB).
Additionally, the Draft Regulation will also offer other incentives to potential investors, including a three-hour investment processing program and exemption from the obligation to secure an environmental impact analysis (AMDAL) license or a disturbance permit. By way of explanation, Mr. Haryono pointed to the disturbance permit.
“An industry that is established via the correct procedures will, of course, be located in an industrial area in which there are currently no residential settlements, therefore there will be no need for any disturbance or AMDAL permits,” elucidated Mr. Haryono.
Tamba Hutapea, Deputy at the BKPM’s Capital Investment Planning Division, concurred with Mr. Haryono, explaining that investors will be able to begin construction in the relevant industrial area immediately after the three-hour investment processing procedure has been completed. This is because industrial areas are created in a way that already takes into consideration the placement of factories and AMDAL. Disturbance/AMDAL permits have thus been deemed unnecessary.
“If an industry is located within the boundaries of an industrial area, then construction can begin straight away, even as the various required licenses and permits are being processed. The investment value is of no concern, and immediate construction is allowed,” stated Mr. Hutapea firmly.
The Draft Regulation is planned to come into force by the end of this November. According to Mr. Haryono, the Draft Regulation was originally supposed to come into effect at the end of October, however it contains many inconsistencies which are currently being ironed out, especially in relation to regulations that pertain at a regional level.
The intention, however, is to prioritize and push through the Draft Regulation, and with this in mind, the Ministry is currently coordinating with the Ministry of Domestic Affairs, which directly regulates local government.
“Many contradictory regulations still exist at the regional level. Therefore, we [the Ministry] are continually coordinating with our colleagues from the Ministry of Domestic Affairs. We [the Ministry] only offer suggestions relating to all matters that fall under the control of the Ministry of Domestic Affairs and industrial policy, and then leave it to their discretion.” asserted Mr. Haryono.
Mr. Hutapea expressed his agreement with Mr. Haryono and asserted that the full support of local governments was essential as regards the implementation of industrial-area policy, as new industrial zones would be spread across Indonesia’s various regions.
“Without the support of local governments, then this policy is guaranteed to fail,” concluded Mr. Hutapea.
(sp)