T

he Investment Coordinating Board (BKPM) is optimistic about reaching its realized investment target this year as the latest data shows that it was half way to meeting the target by the first half.

The BKPM is aiming for Rp 594.8 trillion (US$45.3 billion) worth of investment coming to the country throughout 2016, up by 9 percent from the Rp 545.4 trillion booked the previous year.

Speaking at a press conference on Wednesday, BKPM deputy director for investment monitoring and implementation Azhar Lubis said the realized investment for the January-June period had reached “half of the full-year target”.

“[We] have [hit half of the target]. Of course we hope to achieve the full-year target by continuing the fast-tracking permit process,” he told reporters.

Then BKPM chief Franky Sibarani was initially scheduled to attend the press briefing but he canceled after he had been summoned to the State Palace for the Cabinet reshuffle announcement, during which he received a new posting as deputy industry minister. His position will be replaced by outgoing trade minister Thomas Lembong.

Azhar declined to further elaborate on the figures regarding the realized investment data, saying that the details would be presented later by the new BKPM chief.

The BKPM has since last year introduced a three-hour permit program, through which companies with more than 1,000 employees or a minimum investment of Rp 100 billion can set up within three hours compared to the weeks the process took before.

Azhar said the implementation of the three-hour program was more flexible and open to other priority sectors, such as manufacturing.

On top of that, to better reach the goal, the BKPM will also open the three-hour program to any investors willing to create new companies or buy local firms here using repatriated funds expected to enter the country under the government’s newly kicked off tax amnesty program.

Investment from repatriated funds expected from the tax amnesty policy, will be accepted, as long as the applicants show proof that they have paid tax on the funds and they invest in government priority sectors, including manufacturing, export, import substitution, manpower-intensive firms, maritime, tourism and agriculture.

“We’ll ease it for them through the three-hour permit desk, so they’ll feel more secure. They have to show tax receipts too,” he said.

Azhar revealed that the BKPM had received inquiries about investing repatriated funds but the potential investors had yet to proceed with the tax payments.

The BKPM also hopes to reach the Rp 594.8 trillion target on the new incentives announced by the government for companies inside the special economic zones (KEKs).

Finance Ministry Regulation No. 104/PMK.010/2016, which will take effect on Aug. 1, frees businesses inside KEKs from taxes on certain imported goods, including machinery and spare parts.

The incentives also include income tax reduction ranging from 15 to 100 percent for between five and 25 years, depending on the capital and local resources used.

The nine KEKs, by date, are Tanjung Lesung in Banten, Sei Mangke in North Sumatra, Palu in Central Sulawesi, Bitung in North Sulawesi, Mandalika in West Nusa Tenggara, Morotai in North Maluku, Tanjung Api-Api in South Sumatra, Maloy Batuta Trans Kalimantan in East Kalimantan and Bitung in North Sulawesi. Sorong in West Papua is awaiting government regulation to be included.

Each KEK is linked to a special industry sector, such as tourism at Tanjung Lesung and Mandalika and Sorong, which it is planned, will specialize in the processing and manufacturing of mining, agriculture and fisheries products as well as infrastructure.

However, Coordinating Economic Minister Darmin Nasution recently warned that the success of each KEK depended on its management, especially in publicizing the latest incentives.

“Some are doing well, some are lacking and that depends on how active and strong the management is,” he said as quoted by Kontan.co.id.

Azhar shared Darmin’s view, saying some KEKs, like Bitung, Palu, Morotai and Maloy Batuta Trans Kalimantan needed to be more proactive in attracting investors.

The BKPM’s target of Rp 594.8 trillion in realized investment is a 14.4 percent increase on the Rp 519.5 trillion in 2015, which it surpassed with Rp 545.4 trillion.