Indonesia's SEZ Area Still Loses To Malaysia To Vietnam

Illustration. (Photo: Doc. Antara)

JAKARTA - The special economic zone (SEZ) developed by the government is still losing compared to neighboring Malaysia to Vietnam. Starting from investment achievements and regional areas.

Based on data from the Coordinating Ministry for Economic Affairs, the area of 25 Indonesian SEZs until the first semester of 2025 reached 23,797 hectares (ha). This number is still inferior compared to neighboring Thailand which recorded 622,000 ha from 10 SEZs.

Then, Malaysia was recorded to have an area of 2.14 million ha from 6 SEZs. Meanwhile, Vietnam is 1.62 million ha from 4 SEZs, the Philippines is 70,476 ha from 419 SEZs, and India is 39,205 ha from 365 SEZs.

The area (SEZ in Indonesia) is far from Malaysia, Thailand is more than 600,000 ha. Even from the Philippines, and India is still losing," said Secretary of the Coordinating Ministry for the Economy Susiwijono Moegiarso at a press conference, at the Coordinating Ministry for the Economy Office, Jakarta, Tuesday, September 9.

In addition, he said, the Indonesian competing countries also offer attractive fiscal and non-fiscal incentives in their SEZ areas. Like Thailand, offering a 20 percent reduction in the corporate income tax rate (CIT) Based on its business, tax incentives for industrial support businesses 4.0, to a 70 to 100 percent decrease in investment tax for five to 10 years.

Meanwhile, Malaysia offers an investment tax reduction of 70 to 100 percent over five years. Then, providing an investment incentive of 60 percent to 10 consecutive years. In addition, the Malaysian SEZ also offers special incentives for strategic sectors such as manufacturing to the green industry.

Meanwhile, the Vietnam SEZ offers a 10 percent reduction in the agency's income tax for large investment projects. Then, tax exemptions of 50 percent to 4 years, tax discounts for the next 9 years to exemption from import duties and entry.

The Philippine SEZ offers export companies with income tax removers of four to seven years and can be extended. Then additional tax reductions of up to 10 years (training, research, and raw materials). Also, additional tax reductions for 5 years.

Then, SEZs in India offer incentives for export companies in the form of eliminating income taxes for four to seven years and special agency income tax rates (5 percent discount) or additional tax reductions for 5 years.

Even so, Susiwijono said the potential for SEZ development in Indonesia is still very large. This includes incentives to attract more investors to enter.

"If we look at the potential for SEZ development, it is still very large. So we conclude that our 25 SEZs compared to countries in ASEAN or India are still very small and incentives need many areas to be developed to attract investors," he said.

The 25 SEZs that are currently operating are spread from Aceh to Papua, of which 7 SEZs are in Java and 18 others are spread outside Java.

Of the 25 SEZs that are currently operating, 13 of them are engaged in the industrial sector and 12 other SEZs are in the service sector.

"This is good because the SEZ that continues to be developed is not only centered on the island of Java, but spreads," he said.

For your information, the government through the Coordinating Ministry for the Economy noted that the realization of investment in the performance of 25 Special Economic Zones (SEZs) reached Rp294.4 trillion. Where the absorption of labor on this project reached 187,376 people.

Meanwhile, investment realization in the SEZ area during the first semester of 2025 reached IDR 40.48 trillion. This figure is equivalent to 48.2 percent of this year's investment target of IDR 84.1 trillion.

Throughout the first semester of 2025, 25 SEZs that have been operating absorbed 28,094 people by involving 65 business actors. This figure is equivalent to 56.4 percent of the labor absorption target throughout the year 49,779 people.