Singapore And Malaysia Create Exclusive Zones, Government Review Batam SEZ Incentives

JAKARTA - The Coordinating Ministry for Economic Affairs (Kemenko Perekonomies) revealed that it would evaluate the incentives given to the Batam Special Economic Zone (SEZ) in order to be more looked at by investors compared to the Exclusive Economic Zones of Malaysia and Singapore.

Secretary of the Coordinating Ministry for Economic Affairs Susiwijono Moegiarso explained that the evaluation was carried out based on input from investors on incentives and facilities provided to the Batam SEZ.

"So that's what we have to compete with them, especially we have to redesign Batam again so that it's competitive," he told the media crew, Thursday, July 25.

According to Susi, the fiscal incentives for the Batam SEZ can still be re-evaluated and investors provide input for the government to provide fiscal incentives in the form of tax holidays to tax allowances.

"Because it's a fiscal incentive, we're dealing with tax holidays. Yesterday, it's still not, this is true, there are still many investors, for our tax holiday tax allowance," he explained.

Furthermore, Susi also said that investors provide notes on the facilities provided when investing in the Batam SEZ. This is because some non-fiscal facilities such as gold visas, the use of foreign workers, and electricity and water rates are still not optimal.

"Then the facilities related to taxes in order to import Then those related to non-fiscal incentives, the issue of gold visa problems with the use of foreign workers, and so on," he said.

Susi said that there are still many investors comparing electricity and water rates imposed in Batam with Johor Baru. Investors rate electricity and water in Johor Baru is more competitive than Batam.

They (investors) compare electricity and water rates in Batam with others. We have to recount this. Because if not, we are no longer competitive, because there are now many investments to Batam So the SEZ, PSN-KEK, then Batam Special Batam, for that investment," he concluded.

For information, Malaysia and Singapore are rumored to be building the first cross-border Exclusive Economic Zone in Southeast Asia, which means it is a rival to the government over the Batam SEZ and Bintan SEZ which have already been built.