Indonesia considers special economic status for halal industrial zones | Salaam Gateway

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JAKARTA – The Indonesian government is discussing the designation of halal industrial zones as special economic zones (SEZs) to attract investors, Afdhal Aliasar, director of Islamic economy and industry development, told Salaam Gateway. halal at the National Committee for Islamic Finance and Economics (KNEKS).

Indonesia has fifteen SEZs and the government is keen to attract more investment through them.

SEZs benefit from certain privileges. In a new regulation signed by President Joko Widodo in February, customs facilities and facilities provided to business entities in SEZs include exemption from import duties and are not subject to taxes on the import of capital goods within the framework of SEZ development. Companies that invest in a main activity can also obtain a corporate tax reduction on the income received or obtained from the main activity.

A new law would be needed to make SEZ status a reality for halal industrial zones, but for now, discussions are underway, according to Aliasar.

Halal zones represent a very small proportion of the more than 100 industrial zones across Indonesia, but more could be on the way, according to Ignatius Warsito, industrial region director at the Ministry of Industry.

Cikande Modern Industrial Zone and Safe N Lock Eco Industrial Park have applied for licenses to operate as halal industrial zones through the ministry’s National Information System (SIINas), Warsito said.

The requests came after the ministry issued regulations on how to obtain a halal industrial zone declaration letter number 17/2020 which went into effect on June 11.

“Currently, we are open to all 118 industrial zones in Indonesia, as long as they meet the requirements, we will support them so that the implementation is much faster,” Warsito said, adding that it is up to the industrial zones if they want to become halal.

The ministry is currently reviewing all documentation related to Modern Cikande and Safe N Lock Eco license applications, and will conduct on-site verifications with representatives of the Indonesian government halal body BPJPH and Majelis Ulama Indonesia which works with the national authority. on halal issues. .

Seven other industrial zones have expressed interest in becoming halal zones, Warsito said. He said it was Batamindo Industrial Zone, Bintan Industrial Park, Jakarta Pulogadung Industrial Zone, Makassar Industrial Zone, Surya Borneo Industri, Rebana Metropolitan Area (Cirebon , Subang, Majalengka) in West Java and Tenayan Industrial Zone.

The seven sites, according to the director, have the capacity to meet Halal requirements, including being equipped with laboratories, halal audit institutions, water treatment facilities, management offices and systems and halal management teams.

According to ministry regulations, industrial zones should always apply for the license online to secure the declaration letter. The Ministry of Industry’s online system will also monitor progress in the development of halal industrial zones by location.

“We can monitor every progress that has been made in infrastructure development because they are obligated to report it regularly,” Warsito said.

According to Warsito, the conversion of the Rebana West Java Metropolitan Metropolitan Industrial Zone to a Halal Zone was proposed directly by Vice President Maruf Amin and West Java Governor Ridwan Kamil. The factors that motivated their decision were access to the ports of Patimban and Cirebon, as well as access to Trans Java toll roads and large amounts of land reserves owned by state-owned companies.

The Tenayan area was proposed directly by the governor of Riau Syamsuar. The region has been the backbone for manufacturing halal products, including food, pharmaceuticals and cosmetics. The local government of Riau has also published a master plan for the development of the halal industrial zone 2018 – 2038 under the regulation of the regional government number 9/2018.

KNEKS ‘Aliasar is also looking for investment opportunities with factories relocated outside of China. 17 other companies are also planning to open production facilities in Indonesia, local newspaper The Jakarta Post reported citing President Joko Widodo.

Aliasar said these production facilities could move to halal industrial zones if their products are halal.

“We should drive them to halal industrial zones. But I think that in this regard, the Investment Board Committee (BKPM) and the Ministry of Industry have a more important role.

“I hope there will be more halal factories moving to Indonesia. We need to act more effectively to take advantage of this opportunity, ”he said.

(Reporting by Yosi Winosa; Editing by Emmy Abdul Alim [email protected])

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