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🇮🇩 Indonesia /Economy & Trade

Indonesia Offers Tax Exemptions to Attract Investors to Bali's Financial Hub

From Tempo · (16m ago) Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

TLDR

  • Indonesia's Finance Minister Purbaya Yudhi Sadewa promised tax exemptions for investors in Bali's International Financial Center (IFC).
  • The government aims to attract foreign capital, strengthen foreign exchange reserves, and stimulate the economy by offering zero percent tax on investor assets.
  • The Ministry of Finance is collaborating with other government bodies and the Sovereign Wealth Fund to finalize regulations and accelerate the IFC's development.

Indonesia is rolling out the red carpet for global investors with a bold offer of tax exemptions for its new International Financial Center (IFC) in Bali. Finance Minister Purbaya Yudhi Sadewa has declared that the government is prepared to offer zero percent tax on investor assets, a move aimed at drawing significant capital inflows and bolstering the nation's foreign exchange reserves.

If they ask for zero percent, I will give it to them. With that, zero is no problem, as long as the money enters. This can also help strengthen our foreign exchange reserves

— Purbaya Yudhi SadewaFinance Minister Purbaya Yudhi Sadewa explaining the tax exemption policy to attract investors to the IFC in Bali.

This initiative, spearheaded by the Ministry of Finance in collaboration with the Coordinating Ministry for Economic Affairs and the Sovereign Wealth Fund Danantara, is a strategic push to position Bali as a major financial hub. The government believes that by incentivizing investors to hold their assets in Indonesia, they can also purchase government bonds, thereby easing market pressure and increasing the pool of domestic bond buyers.

The development of the IFC is a priority for President Prabowo Subianto's administration, as evidenced by the recent working visit of Coordinating Minister Airlangga Hartarto. The focus is on finalizing regulations and ensuring the zone meets international standards to attract global players. This aggressive approach signals Indonesia's determination to compete on the global financial stage and leverage its strategic location and growing economy.

This way, the supply of our bond buyers will increase

— Purbaya Yudhi SadewaFinance Minister Purbaya Yudhi Sadewa explaining how tax incentives for investors will benefit the government bond market.

From our perspective at Tempo, this is a crucial step towards economic resilience. While international coverage might focus on the tax breaks, we see it as part of a broader strategy to attract long-term investment and integrate Indonesia more deeply into the global financial system. The success of the IFC will not only depend on these incentives but also on the overall stability and attractiveness of Indonesia's economic environment, an area we will continue to monitor closely.

The review serves as a follow-up to directives from President Prabowo Subianto.

— Airlangga HartartoCoordinating Minister for Economic Affairs Airlangga Hartarto on the importance of assessing the IFC's readiness.
DistantNews Editorial

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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