The Indonesian government is finalizing strategic measures through the Indonesian International Financial Center (PFII) Bill to attract global capital flows. The plan includes offering highly competitive fiscal facilities, such as exemptions from corporate income tax (PPh), VAT (PPN), and import duties for business actors in the region, in an effort to rival global financial hubs like Singapore and Dubai.
However, the policy offering up to 100% incentives has sparked debate among domestic business actors. The Indonesian Chamber of Commerce and Industry (Kadin) and the Indonesian Employers Association (Apindo) warned of potential competition distortion. They emphasized that incentives must be selective and transparent so as not to disadvantage domestic companies that have been obediently paying taxes, as well as to ensure that it does not merely result in a shifting of business activities.
On the other hand, economic experts noted the importance of maintaining reputation and credibility in the eyes of international investors. Professor at FEB UI, Telisa Aulia Falianty, reminded that the cost of incentives must be managed wisely while maintaining public trust. She suggested that the government should not automatically grant tax exemptions up to 100% without a deep evaluation of the long-term economic benefits for the country.
Chief Economist at BCA, David Sumual, added that the attraction of PFII cannot rely solely on tax incentives. Real competitive advantage, legal certainty, and qualified infrastructure availability are key to Indonesia competing regionally. According to him, without clear comparative advantages, fiscal incentives will not be strong enough to shift capital flows from other established financial hubs.
Chairman of Commission XI of the House of Representatives (DPR), Mukhamad Misbakhun, emphasized that this area will operate as a special enclave with a legal system designed separately to facilitate business dispute resolution. The government is even open to integrating PFII into a Special Economic Zone (SEZ), enabling investors to access double incentives to accelerate the development of the domestic financial ecosystem.
