A Number of Reasons Entrepreneurs Reject Application of Batam Special Economic Zone

By : Herry Barus And Aldi Firhand. A | Monday, June 04 2018 - 23:38 IWST

Illustration of Batam Industrial Estate (Foto Ist)
Illustration of Batam Industrial Estate (Foto Ist)

INDUSTRY.co.id - Batam - Entrepreneurs reject the implementation of Special Economic Zone (KEK) Batam, which is now being discussed by the Coordinating Ministry of Economic Affairs with the Board of Free Trade Area and Batam Free Port.

"Once studied deeply, the conclusion we get is the application of more SEZ because of political interests rather than economic interests," said Chairman Apindo Riau Islands Province in Batam, Sunday (3/4/2018).

He said employers from various associations want Batam to remain Free Trade Zone (FTZ) status, rather than having to transform into SEZ.

According to entrepreneurs, the status of SEZ is more favorable for the authorities, while the status of FTZ is more suitable to support business passion.

"We have compared one by one, FTZ is far superior than SEZ," he said.

Indeed, until now, the implementation of SEZ is still discussed by Coordinating Minister for Economy who also served as Chairman of the Board of Batam Region, Darmin Nasution.

However, certainly not all areas in Batam Island to SEZ. In contrast to the FTZ that applies thoroughly across the major islands.

The central government until now still consider the areas included in SEZ.

"If the SEZ area is determined, the area outside the SEZ should be subject to VAT and PPNBM, and of course, all goods in Batam will rise again, which will be entrepreneurs and the public, that is a fact," he said.

The enactment of VAT and PPNBM in the city bordering Singapore and Malaysia will also automatically eliminate the privilege of Batam, which has been privileged, as the locomotive of the Indonesian economy.

"We used to struggle for the elimination of VAT and PPNBM in Batam, now that privilege will be revoked again, of course we are disappointed," he said.

Meanwhile, SEZ only provides advantages in accelerated amortization facilities, dividend tax breaks, tax holidays and tax allowances.

"It is only for new companies and investment value must be above Rp500 billion, then when do we local entrepreneurs and the community enjoy it ?," he asked as quoted by Antara.

Local entrepreneurs only get the burden of VAT and PPNBM enforcement, which can increase the price of goods, houses, vehicles and others.

"Therefore, we ask that Batam FTZ status is not revoked or transformed into SEZ If the government wants to provide bonus or incentive for investors, then it can be added to FTZ plus plus, that is what we mean," he said.

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