Purbaya Reveals the Reason for the Government to Give 0 Percent Tax for 50 Years in PFII

JAKARTA - Finance Minister Purbaya Yudhi Sadewa confirmed that the government is preparing an incentive in the form of a 0 percent tax rate for 50 years for financial services business actors operating in the Indonesian International Financial Center (PFII).

According to Purbaya, the policy is designed to increase the competitiveness of PFII so that it is more attractive to global investors compared to other international financial centers, such as Singapore, Hong Kong, and Dubai.

"For the first phase, it seems like that. We compare it with business practices in other similar places. We have to be a little more attractive. Why? We just entered the last. This is where we compete with Singapore, Hong Kong, Dubai, and others," he said in the APBN KITA Press Conference, Tuesday, July 21.

He assessed that without more competitive incentives, it would be difficult for Indonesia to attract investors to invest in PFII, so the government considered that it was necessary to have a policy that could provide added value compared to international financial centers that had already developed.

"If it's not more interesting, it won't come in. If it doesn't come in, I'm tired of meeting with the DPR so there is one sweetener that is like interesting, but it's actually the same thing. Yes, there must be so-and-so, it's called trading. But I think this with such a proposal will definitely be more interesting than Dubai, Hong Kong, Singapore," he said.

Purbaya is also optimistic that the prospects for PFII remain bright amid global economic and geopolitical uncertainties.

According to him, this condition actually increases the need for an international financial center that can be an alternative for business actors and investors.

"I think that when the war ended, PFII became difficult. But we see that the uncertainty has not disappeared. America still attacks. So it's still there. So there is demand for financial centers in the world. We want to take advantage of that," he said.

Regarding the plan to use foreign exchange in business transactions in the PFII area, Purbaya emphasized that the policy would not add pressure on the demand for dollars in the country or weaken the rupiah exchange rate.

According to him, foreign exchange transactions only apply in the PFII area with funds originating from abroad, so that the inflow of foreign capital into Indonesia through PFII has the potential to increase the supply of foreign exchange so that it can have a positive impact on the stability of the rupiah exchange rate.

"It's used in the area, the money is abroad so it doesn't affect the demand for dollars in the country. In fact, if the money comes in, it will add to the supply indirectly, it should strengthen our rupiah position. Because it's not from here, the money is from there to get there," he said.