Infrastructure and Tourism-Infra Development in Indonesia

Transcription

1 Infrastructure and Tourism-Infra Development in Indonesia Indonesia Australia Business Conference 2017 Rainier Haryanto, Program Director Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) 6 November 2017

2 Agenda RPJMN, Strategic, and Priority Infrastructure Projects Update on Strategic and Priority Project Status Solving Infrastructure Issues 2

3 Agenda RPJMN, Strategic, and Priority Infrastructure Projects Update on Strategic and Priority Project Status Solving Infrastructure Issues 3

4 To achieve higher economic growth, Indonesia has determined its infrastructure targets for the period of which were stipulated in the National Medium Term Plan (RPJMN) Logistic Related Banda Aceh Padang Belawan Kuala Tanjung Pontianak Dumai Batam Enggano Panjang Kertajati Pangkal Pinang Cilacap Tj. Priok Singkawang Muara Teweh Palangkaraya Tj. Perak Lombok Maloy Banjarmasin Maratua Makassar Improve transport efficiency by road development and maintenance develop 2,650 km of new roads develop 1,000 km of new toll roads rehabilitate 46,770 km of existing road Tojo Una- Una Sultan Hassanuddin Kupang Pohuwato Bitung Halmahera Moa Miangas Sorong Ambon Namniwel Merauke Jayapura Taria Kenyam Aboy Koroway Batu Location of 24 new seaports & 15 new airports Source: Bappenas Reduce logistic cost by improving railway infrastructure develop new tracks in Java, Sumatra, Sulawesi, and Kalimantan: 2,159 km inter-urban railways 1,099 km urban railways Sea toll concept as a means to support Indonesia in becoming the world maritime axis. develop 24 new seaports increase number of substantial vessels (pioneer cargo, transport vessels, pioneer crossing vessels) develop 60 crossing ports Strengthen connectivity through air transport infrastructure development develop 15 new airports develop air cargo facilities in 6 locations increase number of pioneer airplanes Develop urban transport develop Bus Rapid Transit (BRT) in 29 cities develop Mass Rapid Transit (MRT) in 6 metropolis and 17 large cities. Energy Related Achieve electrification ratio of 96.6% by 2019 through generating capacity improvement develop power plants with total capacity of 35,000 MW Achieving food sovereignty through irrigation system improvement develop 33 new dams and 30 hydropower plants expand 1 million ha irrigation system rehabilitate existing irrigation system Ensure efficiency of fuel production by optimizing domestic refineries build new oil refineries of 2x300,000 barrels Expand existing refineries in Cilacap and Balongan 4

5 Government of Indonesia introduced 245 projects and 2 programs as National Strategic Projects (PSN) with estimated total investment of US$322.8 Billion Projects Projects Sumatra Kalimantan US$49.1 B US$43.3 B 27 Projects Sulawesi US$11.9 B 13 Projects Maluku & Papua US$34.2 B 93 Projects Java US$81.9 B 12 National US$101.5 B Programs Proyek Projects 15 Projects Bali & Nusa Tenggara US$0.8 B PSN includes 15 sectors at project level and 2 sectors at program level Project ROAD RAILWAY SEAPORT AIRPORT INDUSTRI- AL ZONE HOUSING HOUSING Projects Projects Projects Projects Projects Projects Projects Projects Projects Projects Projects Projects Projects WATER & SANITA- TION DAM IRRIGA- IRIGASI TION TECH- NOLOGY SMELTER OIL REFINERY FISHERY 1Project SEA DIKE 1 Project Program Electricity 1 PROGRAM Small- Medium Airplane 1 PROGRAM Exchange rate: US$ 1 = IDR 13,000 5

6 From the PSN, KPPIP has selected 37 Priority Projects out of the PSN stipulated in Coordinating Minister of Economic Affairs Regulation No. 5/ # # New Priority Projects Existing Priority Projects Balikpapan-Samarinda Toll Road 2. Manado-Bitung Toll Road 3. Panimbang-Serang Toll Road Segments of Trans Sumatera Toll Road 5. Probolinggo-Banyuwangi Toll Road 6. Yogyakarta-Bawen Toll Road 7. SHIA Express Railway 8. MRT Jakarta North South Line 9. Makassar Parepare Railway 10.Light Rail Transit (LRT) of Jakarta, Bogor, Depok and Bekasi 11.Light Rail Transit (LRT) of South Sumatera 12.East Kalimantan Railway 13. Light Rail Transit (LRT) of DKI Jakarta 14. Kuala Tanjung International Hub Seaport 15. Bitung International Hub Seaport 16. Patimban Port 17. Inland Waterways/Cikarang Bekasi Laut (CBL) 18. Palapa Ring Broadband 19. Central Java Power Plant (CJPP) 20. Central West Java Transmission Line 500 kv 21. Indramayu Coal-fired Power Plant 22. Sumatera 500 kv Transmission (4 Provinces) 23. Mulut Tambang Coal-fired Power Plant (6 Provinces) 24. PLTGU (16 Provinces) 25. Bontang Oil Refinery 26. Tuban Oil Refinery 27. RDMP/Revitalization of Existing Oil Refineries (Balikpapan, Cilacap, Balongan, Dumai, Plaju) 28. Abadi WK Masela Field 29. Unitization Field Has Jambaran-Tiung Biru 30. Indonesian Deepwater Development (IDD) 31. Tangguh LNG Train 3 Development 32. West Semarang Drinking Water Supply 33. Jakarta Sewerage System 34. National Capital Integrated Coastal Development (NCICD) Phase A 35. Jatiluhur Drinking Water Supply 36. Lampung Drinking Water Supply 37. Waste to Energy Program in 8 Cities 6

7 Included in the PSN are Industrial Estates (IE), Special Economic Zones (SEZ), and Priority Tourism Destination (PTD) projects 7

8 For the SEZ projects, among 12 projects in total, 4 projects are tourism focused 1 SEZ Projects in PSN No Project Project Value (mio US$) Status 1 Lhokseumawe SEZ Preparation 2 Sei Mangkei SEZ Operating 3 Tanjung Api-Api SEZ Preparation 4 Belitung SEZ Construction 5 Tanjung Lesung SEZ Operating 6 Mandalika SEZ Operating 7 Maloy Batuta Trans Kalimantan SEZ Construction 8 Palu SEZ Operating 9 Bitung SEZ Construction 10 Morotai SEZ Construction 11 Sorong SEZ Construction 12 Merauke SEZ - Not Yet Determined : SEZ with focus on tourism industry Preparation (US$ mio) Construction (US$ 1, mio) Operating* (US$1,200 mio) Not yet determined as SEZ by National Council of SEZ (Exchange rate: US$ 1 = IDR 13,000) *Projects in Operating phase may also still undergo construction 8

9 Government support Development of strategic transportation projects to support SEZs SPECIAL ECONOMIC ZONE INFRASTRUCTURE 1. Arun Lhokseumawe 9. Bitung 13. Pelabuhan Hub Internasional 18. Kereta Api Tebing Tinggi Kuala 2. Sei Mangkei 10. Morotai Kuala Tanjung Tanjung 3. Tanjung Api-Api 11. Sorong 14. Pelabuhan Hub Internasional 19. Kereta Api Tanjung Enim Tanjung 4. Tanjung Kelayang (Belitung) 12. Merauke Bitung Api-Api 5. Tanjung Lesung 15. Pelabuhan KEK Maloy 6. Mandalika 16. Pelabuhan Palu (Pantoloan) 7. Maloy Batuta Trans Kalimantan 17. Pelabuhan Sorong Seget 8. Palu 9

10 Government support for SEZs and Tourism Destination under PSN Issuance of regulation to accelerate the delivery of PSN Projects Government Reg. No. 13/2017 on National Spatial Plan (RTRWN) The issuance of RTRWN can encourage the settlement of obstacles that are caused by spatial mismatch in the implementation of infrastructure projects listed in the annex of Government Reg. No. 13/20. This regulation provides legal certainty for regional governments in following spatial planning recommendations for PSN issued by the Ministry of Agraria and Spatial Planning. Presidential Reg. No. 56/2017 Mitigation of Social Impact in the Land Acquisition for PSN This Presidential Regulations is the Government s effort to minimize the social impact of land acquisition for PSN delivery, especially in state-owned land that have been informally inhabited by public. This regulation enables acceleration of land acquisition by providing a strong legal basis in giving compensation for communities whose living spaces and economic opportunities are impacted by infrastructure development on stateowned land. MoF Regulation No. 60/2017 on Procedures for the Provision of Central Government Guarantee for the Acceleration of the PSN Implementation This regulation enables further provision of Government Guarantee with regards to political risk for PSN projects, including SEZs. Usage of this political risk guarantee would provide greater certainty to investors in investing in PSN projects, which is expected to make investment in PSN projects more attractive. 10

11 Government support for SEZs Fiscal incentives in special economic zones INVESTOR (S) Main Activities INCOME TAX REDUCTION % for 5-25 years YES Fit with primary activity? NO Other Activities INVESTMENT ALLOWANCE up to 10 years Import duty and other import tax exemption for capital goods (machinery, equipment, parts, etc) GOODS ENTERING SEZ IMPORT: Deferred import duties and other import taxes; Exempted excise tax FROM CUSTOM AREAS: Exempted Value Added Tax and Luxury Sales Tax GOODS EXITING FROM SEZ EXPORT: General rules TO DOMESTIC MARKET: Import duties follows FTA tariff rates 11

12 Agenda RPJMN, Strategic, and Priority Infrastructure Projects Update on Strategic and Priority Project Status Solving Infrastructure Issues 12

13 Private investors have opportunity to contribute more than half of the total PSN investment value IDR 4,197 Trillion PSN Investment Value PSN requires funding from various sources, including state budget, SOEs/R-SOEs, and private Estimated required funding 1 for PSN of 245 Projects + 2 Program: Total Investment Value State Budget SOEs/ RSOEs Private 1 Exclude 16 projects which investment value is still unknown IDR 525 Trillion IDR 1,258 Trillion IDR 2,414 Trillion Private 57% State Budget 13% SOE/RSOE 30% 5 Sectors with Highest Investment Value: Energy 12 Projects IDR 1,242 Trillion Electricity 1 Program IDR 1,035 Trillion Road 74 Projects IDR 684 Trillion Train 23 Projects IDR 613 Trillion SEZs and IEs 30 Projects IDR 290 Trilion 13

14 Progress status of National Strategic Projects (PSN) + 35 GW Electricity Program 2% 4 projects are completed Progress of 245 PSN + 2 Programs per September % PSN 40% 131 projects are in construction 1 12 projects are in transaction 100 projects are in preparation 5% 1 Including one electricity program under construction category (39% of electricity program has reached construction per April 2017) Progress of 35 GW Electricity Program per October % 3% 6% 35 GW 11% 38% 948 MW are operating 15,126 MW are in construction 13,673 MW have signed PPA but have not reached financial close 3,763 MW are in procurement 2,328 MW are in planning 14

15 Progress Status of 37 Priority Projects as per October 2017 Progress Status of 37 Priority Projects Funding Scheme of 37 Priority Projects 46% 24% 30% Preparation 11 Projects in Preparation Stage Transaction 9 Projects in stage Transaction Stage 17 Projects in Construction Construction stage Stage 51% 9% 40% US$16.4 billion APBN/D State/Regional Budget (including G-to-G loan) BUMN/D US$74.5 billion SOE/Regional SOE Swasta US$95.21 billion Private/PPP Exchange rate: US$ 1 = IDR 13,500 15

16 From the monitoring effort conducted by KPPIP, here are some results of the achievement of the National Strategic and Priority Projects (PSN) PROJECT NAME Patimban Port Hub Internasional Port of Kuala Tanjung PROJECT ACHIEVEMENT Environmental Permit has been issued on February 28, Thus, one of the prerequisites for foreign loan applications through loans from the Japanese Government through JICA has been fulfilled. The Pre-Feasibility Study/Outline Business Case integrated with the port development plan and regional infrastructure development has been completed and socialized to the stakeholders. OBC can be used as a reference for the most optimal funding scheme from the Government of Indonesia. Central - West Java Transmission Line 500 kv Contracts for three packages of Engineering Procurement Construction (EPC) (Tx-Batang section, Batang-Mandirancan 1 section and Batang-Mandirancan 2 section) have been signed in March 2017, so the 928 km line construction can be started. Coal Fired Power Plant Jawa-4 (Tanjung Jati-B) The acceleration of Financial Close was reached on March 31 st, 2017 from the initial target of June 7 th, 2017 so the project can proceed to the construction phase. Serang Panimbang Toll Road The signing of the Toll Road Concession Agreement (PPJT) and the guarantee facility of PT Penjaminan Infrastruktur Indonesia (Persero) has been done in February

17 Agenda RPJMN, Strategic, and Priority Infrastructure Projects Update on Strategic and Priority Project Status Solving Infrastructure Issues 17

18 Issue 1: Easing infrastructure provision and investment Government has also created Economic Policy Packages 1-16 to ease infra provision Economic Policy Package (PKE) PKE 1: National industrial competitiveness PKE 9: Electricity infrastructure, stabilization of meat price PKE 2: Investment permit, tax holiday PKE 10: Micro Small Medium Enterprises PKE 3: Electricity tariff PKE 11: Business credit, pharmaceutical PKE 4: Worker welfare PKE 12: Ease of doing business in Indonesia PKE 5: Revaluation of assets, double taxation and Sharia Banking PKE 13: Housing for low-income society PKE 6: Special Economic Zones PKE 14: E-commerce PKE 7: Labor-intensive industries PKE 15: Logistics PKE 8: One Map, Oil Refinery, Aircraft parts inventory PKE 16: Integrated permit system Policy package that is directly related to the provision of SEZ projects 18

19 Issue 1: Easing infrastructure provision and investment Three Economic Policy Packages are directly related to acceleration of SEZ projects Economic Policy Package 6: Special Economic Zones Incentivize business in SEZs through: Reduction of Corporate Tax, and Entertainment Tax, as well as implementation of Accelerated Depreciation. Abolishment of additional fees. Foreign citizens may own property. SEZ Administrators may issue Land Permits and Business Permits. Economic Policy Package 12: Ease of Doing Business Aims to improve Ease of Doing Business in Indonesia through: Issuance of 16 regulations to improve Ease of Doing Business. Reduction of various business permits from 12 procedures requiring 47 days to 7 procedures requiring 10 days. Reduction of construction-related permits from 17 procedures requiring 210 days to 14 procedures requiring 52 days. Economic Policy Package 16: Integrated Permit System Implementation of permit checklists for SEZ, IZ and Free-Trade Zones (FTZ) that must be completed by the business owner within a specified time. The One-Stop Integrated Services (PTSP) provides necessary documents to the business owner, and the business owner would receive a checklist to complete. This is expected to accelerate the provision of facilities in taxation, customs, and ease in labor, immigration and land acquisition. A Single Submission system is planned to be fully effective by March

20 Issue 2: Indonesia workforce to support infrastructure development Indonesia current workforce structure has potential to support infrastructure development Increasing number of workforce in Indonesia is followed by challenge to increase workforce competitiveness Work Force mn INCREASE Population mn INCREASE Population mn Unemployed 7.02 mn (5.5%) DECREASE Non Work Force mn Source: Central Bureau of Statistics, Feb 16 20

21 Issue 2: Indonesia workforce to support infrastructure development However Current state of employment shows a gap Almost half (42.5%) of Indonesia workforce is elementary school graduate It s difficult to obtain workers with sufficient skill and expertise Highest level of unemployment is on vocational school graduate (9.84%) A breakthrough is needed in preparing next generation of national workforce Indicator 2016 Unemployment Mid Term Development Plan Unemployment Target Number (7.05 mn people) Employed million Workforce mn Source: Central Bureau of Statistics, Feb 16 Unemployed million in mn in mn 1. Returning the state to its task of protecting all citizens and providing a safe environment; 2. Developing clean, effective, trusted and democratic governance; 3. Developing Indonesia s rural areas; 4. Reforming law enforcement agencies; 5. Improve quality of life; 6. Increasing productivity and competitiveness; 7. Promoting economic independence by developing domestic strategic sectors; 8. Overhauling the character of the nation; 9. Strengthening the spirit of unity in diversity and social reform. 21

22 Issue 2: Indonesia workforce to support infrastructure development Vocational education revitalization needed to support infrastructure and tourism industry Vocational School Polytechnic Community Academy Non Professional Labor Presidential Decree to revitalize vocational school Revitalization of Polytechnic and Academy: Teacher and lecturer preparation Increase in total student capacity Quality of supporting physical infrastructure Cooperation with industry Curriculum revamp Certification and accreditation Improvement of management capacity Development of new study program of polytechnic Revitalization of Work Training Centre Certified internship INDONESIA PROFESSIONAL WORKFORCE MEA 1. Health 2. Tourism 3. Logistic service 4. Online service 5. Air cargo service 6. Agro-product 7. Electronics 8. Fishery 9. Rubber-based product 10. Textile and clothing 11. Automotive 12. Wood-based product Profession: 1. Engineer 2. Nurse 3. Architect 4. Surveyor 5. Doctor 6. Dentist 7. Accountant 8. Hospitality 22

23 TERIMA KASIH KPPIP Menara Merdeka, 8 th floor Jl Budi Kemuliaan I No 2, Jakarta sekretariat@kppip.go.id Landline :

24 ANNEXES

25 Example of National Strategic Tourism Infrastructure Project: 1. Mandalika Special Economic Zone/Priority Tourism Destination Location Investment Value Funding Scheme Mandalika, West Nusa Tenggara IDR 177 billion SOE Description Special Economic Zone focusing on agro-industry and eco-tourism industry, with total area of 1,250 ha Will be developed for meetings, incentives, conferencing, exhibitions purpose, leisure spot, luxury lodging, and commercial center for products from Central Lombok Project Owner Construction 2016 Operation Target 2017 Latest Status PT Indonesia Tourism Development Corporation (ITDC) SEZ Mandalika is ready to operate Chairman of National Board of SEZ and Governor of NTB has requested the President to inaugurate SEZ Mandalika in September 2017 Development and improvement Mandalika Kuta Beach (total area of about 5 ha) has reached 90% Administrator's Office has been established and is ready to serve accelerated investment permit (3 minutes) There are four 4-star and 5-star hotels have started land-clearing process, and initial construction, including Pullman Hotel and Clubmed Hotel Government will support the extension of Lombok International Airport runway, port revitalization, and clean water network Construction for roads within 11km of the area is currently at procurement process 25

26 Example of National Strategic Tourism Infrastructure Project: 2. Morotai Special Economic Zone/Priority Tourism Destination Location Investment Value Funding Scheme Project Owner Morotai Island Regency, North Maluku USD 520 billion Private PT Jababeka Morotai Construction 2016 Operation Target 2018 Description Special Economic Zone focusing on fish processing industry, manufacture, logistics, and tourism Government has committed to provide supporting infrastructures including the provision of national roads, airports, ports and electricity supply Latest Status The SEZ regional councils, regional secretariat councils, and administrators have been established in 2014 Is currently under construction 200 hectares of land has been cleared and land is being prepared for construction, while 3km of entrance road has been built SEZ Morotai will be supported by several strategic infrastructure, includind Morotai outer ring-road and Pitu Airport most sections of the Morotai ringroad has been built, remaining sections connecting Hapo Village to Bere Village is yet to be built Stage 1 development for container field, storage warehouse, speed boat jetty and management office renovation has been started 26

27 Progress Status of Selected Tourism Supporting Infrastructure Project 3. Yogyakarta Bawen Toll Road Location Investment Value Funding Scheme Project Owner Yogyakarta Central Java Estimated USD Million Potential for PPP Indonesia Toll Road Authority Construction 2018 Operation Target 2020 Description The Yogyakarta - Bawen Toll Road is expected to support tourism around Yogyakarta, Semarang, and Solo, especially The Borobudur Temple. This toll road will connect the existing toll road, Semarang Solo Toll Road with the Special Region of Yogyakarta. Based on the study, the toll road will be 71,56 km with the expected average daily traffic amounted to 16,322 car/day. Latest Status The feasibility study of Yogyakarta Bawen Toll Road has been completed in But, it needs to be redeveloped to accommodate the updated information. Thus, KPPIP is currently preparing the Outline Business Case (OBC) which will be completed in December The funding scheme for the construction of Yogyakarta Bawen is potential for PPP. However, the funding scheme determination will be based on the OBC result. 27

28 Progress Status of Selected Tourism Supporting Infrastructure Project 4. Serang-Panimbang Toll Road Location Investment Value Funding Scheme Project Owner Banten Province USD 410 Million PPP Indonesia Toll Road Authority Construction 2017 Operation Target 2019 Description The development of this 83.6-km toll road aims to provide access to Tanjung Lesung Special Economic Zone (SEZ) and Ujung Kulon National Park. In addition to promoting tourism development in Tanjung Lesung and Ujung Kulon National Park, this toll road is expected to reduce logistic costs from the industrial zone in Pandegelang to ports in Jakarta. Latest Status In February 2017, the concession of Serang-Panimbang Toll Road has been awarded to PT Wijaya Karya GoI will implement Availability Payment scheme in Cilleles-Panimbang section (33 km), which is currently in Prequalification process of construction business entity procurement Currently, Serang-Panimbang Toll Road is in the land acquisition process, specifically in identification and mapping the land ownership 28

29 Progress Status of Selected Non-Tourism Infrastructure Project 5. Kuala Tanjung International Hub Port Location Investment Value Funding Scheme Project Owner North Sumatra Estimated US$ 2.25 billion (Phase I) Potentially PPP (to be determined) Ministry of Transportation Target Construction Estimated in mid 2019 Target Operation Estimated in 2021 Description The development of an international hub seaport as the gateway to Western Indonesia. The port is expected to serve transshipment cargo by 2.3 million TEUs in The International Hub Port is expected to accommodate captive and transshipment cargos from international and domestic, especially from and to Sei Mangkei SEZ and Kuala Tanjung Industrial Zone. Latest Status The Outline Business Case (OBC) has been completed and distributed to stakeholders. The OBC s objective is to ensure the planning and preparation of the project meets the criteria and depth of study that is accepted by the market, and also provide recommendation on port area and regional infrastructure development. Private sector can participate as developer and operator of the port, terminal and industrial zone. The land including industrial zone will be acquired by the Indonesian Government if PPP scheme is selected. 29

30 Progress Status of Selected Non-Tourism Infrastructure Project 6. Bitung International Hub Port Location Investment Value Funding Scheme Project Owner North Sulawesi Estimated US$ 2.55 billion Potentially PPP (to be determined) Ministry of Transportation Target Construction Estimated in 2020 Target Operation Estimated in 2022 Description The development of an International Hub Seaport in Bitung, North Sulawesi, to support the development of Bitung SEZ. The International Hub Seaport will also support the industrial activities in East Indonesia, including Ambon and Ternate (Agriculture, Manufacturing, and Mining), and Samarinda, Balikpapan, Tarakan, and Nunukan (Coal, Oil, and Plywood). In 2034, the capacity is planned to be up to 2.25 Million TEUs. Latest Status Currently in the development of OBC, which is facilitated by KPPIP. The OBC will analyze the integration of the existing port, Bitung SEZ, and Lembeh Island. Land acquisition will be started after the completion of the OBC. Private sector has the potential to participate as developer and operator of the port and terminal. The private role will be defined based on the OBC. PT Pelindo IV is currently developing the existing port in Bitung. 27

31 List of National Strategic Projects with the potential for private sector involvements (1/2) No Project Name Sector Province Investment Value (US$ Million) Transportation and Road sectors 1 Kertajati Airport Airports West Java Kuala Tanjung International Hub Port Ports North Sumatera 2,307,7 3 Bitung International Hub Port Ports North Sulawesi 2, Trans Sumatera (Padang Pekanbaru) Roads Sumatera 2, Yogyakarta Bawen Toll Road Roads D.I. Yogyakarta Central Java Other sectors 6 Cilacap refinery Energy Central Java 5, Balikpapan Refinery Energy East Kalimantan 5, Balongan Refinery Energy West Java 1, Bontang Refinery Energy East Kalimantan 14, Waste to Energy (Semarang, Makassar, Tangerang) Energy Central Java, South Sulawesi, Banten Jakarta Sewerage System Water & Sanitation DKI Jakarta 5, Kuala Tanjung Industrial Zone Industrial Zone North Sumatera 346,2 13 Tanjung Lesung Special Economic Zone Industrial Zone Banten Landak Industrial Zone Industrial Zone West Kalimantan Tanggamus Industrial Zone Industrial Zone Lampung 1,

32 List of National Strategic Projects with the potential for private sector involvements (2/2) No Project Name Sector Province Investment Value (US$ Million) 16 Jorong Industrial Zone Industrial Zone South Kalimantan 1, Maloy Batuta Trans Kalimantan Special Economic Zone Industrial Zone East Kalimantan Bantaeng Industrial Zone Industrial Zone South Sulawesi 1, Bitung Special Economic Zone Industrial Zone North Sulawesi Morowali Industrial Zone Industrial Zone Central Sulawesi 3, Konawe Industrial Zone Industrial Zone Southeast Sulawesi 2, Mandalika Special Economic Zone Industrial Zone West Nusa Tenggara Buli Industrial Zone Industrial Zone North Maluku Morotai Special Economic Zone Industrial Zone North Maluku Teluk Bintuni Industrial Zone Industrial Zone West Papua 2, Batulicin Industrial Zone Industrial Zone South Kalimantan Java Integrated Industrial Port Estate Industrial Zone East Java 1, Dumai Industrial Zone Industrial Zone Riau 1, Tanjung Buton Industrial Zone Industrial Zone Riau Multi Purpose Satellite Technology National Sumatera 500kV Transmission Electricity Sumatera 1,

33 List of Fiscal Incentives for SEZs (1/4) NO. SUBJECT INCENTIVES/FACILITIES 1. CORPORATE INCOME TAX (PPh) 1. Primary Industry (Tax Holiday): Reduction by % for years for investment more than Rp. 1 trillion (USD 77 million) *USD 1 = IDR 13,000 Reduction by % for 5-15 years for investment between Rp. 500 billion-1 trillion (USD million) *USD 1 = IDR 13,000 Reduction by % for 5-15 years for investment between for investment less than Rp. 500 billion (USD million) *USD 1 = IDR 13,000 in particular area 2. Other than Primary Industry (Tax Allowance): Net income reduction by 30% of the amount invested, spread in 6 years (5% per year); Accelerated depreciation and amortization; Reduction of the withholding tax rate on dividends paid to non residents to 10% (or lower if treaty is available); Loss carried forward facility for period up to 10 years. 2. VALUE ADDED TAX (PPN) AND SALES TAX ON LUXURY GOODS (PPnBM) Imported goods: exempted Goods delivered among companies in SEZ: exempted Goods delivered among companies in other SEZ: exempted 33

34 List of Fiscal Incentives for SEZs(2/4) NO. SUBJECT INCENTIVES/FACILITIES 3. IMPORT DUTIES AND EXCISE Deferred import duties for imported goods Exempted excise for imported goods For goods delivered to custom areas (domestic), import duties follows FTA tariff rates 4 NEGATIVE LIST Negative list not applied in SEZ, except for: Prohibited activities Business reserved for SME 5. RESTRICTION AND LIMITATION TO EXPORT AND IMPORT Restriction and export limitation is apply in SEZ Import limitation is not applied until the goods enter the custom areas (domestic area) 6. BUSINESS LICENSES Start up business license will be proceeded by SEZ administrator within 3 hours. All procedures related to export, import, immigration, working permit, etc., will be handled by SEZ Administrator. 34

35 List of Fiscal Incentives for SEZs(3/4) NO. SUBJECT INCENTIVES/FACILITIES 7. FOREIGN PROPERTY OWNERSHIP IN TOURISM SEZ Exempted from Luxury and Very Luxury Sales Tax Foreign individual and foreign corporate can own properties in SEZ, including landed house The status of the properties are Right to Use (Hak Pakai) for 30 years and could be renewed up to 80 years Stay Visa will be given to property owner in SEZ 8. LOCAL TAXES IN TOURISM SEZ Reduction of local taxes Reduction of local retribution 9. LABOUR AND EMPLOYMENT Special Wage Council and Special Tripartite Consultation will be established in SEZ Limitation of Labor Union Forum Agreement and extension of Expatriate Employment Plan by SEZ Administrator 35

36 List of Fiscal Incentives for SEZs (4/4) NO. SUBJECT INCENTIVES/FACILITIES 10. IMMIGRATION Immigration facilities for Individual working in SEZ, including his/her family: VOA for 30 days and could be extended 5 times Multiple entry Visa for expatriate and his/her family Stay Visa for foreign individual who owned property in Tourism SEZ Retirement Visa for individual who intended to stay in Tourism SEZ 11. LAND TITLING Land Titling in SEZ: Right to Build (HGB) will be given for Indonesian citizen or corporate bodies established in Indonesia, for 30 years, could be extended for 20 years dan renewed for 30 years (total 80 years) Right to Use will be given for foreign individual and foreign corporate, for 30 years, could be extended for 20 years and renewed for 30 years (total 80 years) Extension and renewal of Right to Build could be applied after the business entering commercially operated period Extension and renewal of Right to Use could be applied after the propertie(s) is fully owned 36