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Govt dishes out incentives to make headway on new capital
Tax exemptions and other deal sweeteners are designed to lure investors to the megaproject for Indonesia’s new capital, but a critic says the "fire sale" of incentives reflects panic in the administration.
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Close look: President Joko “Jokowi” Widodo inspects the progress on a toll road that will lead to the new capital city of Nusantara in East Kalimantan on Feb. 22, 2023. (Presidential Secretariat's Press Bureau/Laily Rachev)
T
he government has issued a regulation to grant investors willing to help build Indonesia’s new capital city years of corporate income tax exemptions, decade-long permits for bringing in foreign workers and almost century-long land rights.
Those are just some of the incentives stipulated in Government Regulation No. 12/2023, which was issued on Thursday with the aim of giving investors the assurances and facilities they need to get engaged in the megaproject in East Kalimantan.
Nusantara Capital City (IKN) Authority head Bambang Susantono said the regulation proved the government was committed to realizing the project and would help speed up the development, be it with the support of domestic or foreign investors.
“This government regulation will provide attractive sets of policies with the maximum possible incentives within the confines of the law,” Bambang said in a statement on Thursday.
Read also: Investors eye new capital but stay on sidelines ahead of elections
Implementing regulations for the new rules would be introduced soon by the Finance Ministry and the IKN Authority, he added.
Investment Minister Bahlil Lahadalia said in a statement on Thursday that the regulation did not offer incentives only to large entities but also to micro, small and medium enterprises (MSMEs).
