Industrial Area in Java Still Shining for Investors

INDUSTRY.co.id - Jakarta - The government's efforts to boost the distribution of manufacturing industries is unlikely to get a warm welcome.

Due to adequate infrastructure, industrial area managers assess Java Island remains the most ideal for developing the manufacturing industry

The government is preparing a revision of Government Regulation No. 142 of 2015 on Industrial Zone to accommodate the development equity program outside of Java. In this revision, the government will be more generous to share incentives for investors.

"We have to be honest, this private sector-driven industrial park is the fastest development," said Director General of Industrial Zonation Development of the Ministry of Industry, Imam Haryono during the FDG event of the National Industrial Economy Committee in Jakarta (9/2/2017).

The Government will add four chapters in PP number 142 of 2015. The four are the Industrial Zone Facility, the Industrial Zone Standards, the Government Initiative for Industrial Estate Development, and the Industrial Zone Committee.

Fiscal incentives are provided in the form of reduction of income tax (PPh) of Investment or Corporate Income, exemption of imported value added tax (VAT), machinery, and factory equipment, to import duty exemption.

Meanwhile, non-fiscal incentives are provided in the form of ease of development and management of electricity for their own needs and industries within the Area. In addition, investors are also given local tax incentives in the form of reduction, relief, or exemption of tax and retribution of Land Acquisition and / or Building Acquisition Levy (BPHTB) and Street Lighting Tax (PPJ) for environmental road within Industrial Estate.

The incentives provided will be adjusted to the Grouping of Industrial Development Areas (WPI). Grouping is done based on the level of progress of industrial development in each region.

At the same time Chairman of PT Jababeka, Setyono Djuandi Darmono revealed, Industrial area is not all manufacturing. So it should outside the island of Java does not have to concentrate on building the manufacturing industry.

"The development of industrial areas outside Java will take a long time and a big cost because it must start with infrastructure development," he explained.

He noted there are at least three issues related to the development of industrial estates. First, the time of development is long so it needs political stability. Second, determining the right location, related to natural resources and infrastructure. Third, from the readiness side of human resources.

From the investor side, the island of Java meets at least seven basic infrastructures to build the manufacturing industry.

The seven infrastructures are ports, airports, logistics systems, water and electricity, toll roads connecting industrial areas with targeted markets, energy supplies, and modern telecommunication systems.

"The concentration of the industry must be in big cities with strong infrastructure such as Jakarta, Semarang, or Surabaya" he added.