Riri Rahayu, M. Julnis Firmansyah, Jakarta – Public policy observer from Trisakti University, Trubus Rahadiansyah, opined that the government of President Joko Jokowi Widodo does not need to rush to pursue the realization of the new capital city or IKN project in East Kalimantan.
"I mean don't make policies that offer too much [incentives]. Don't be too eager to bring in investors," Trubus said to Tempo via a phone call on Sunday, June 11, 2023.
He opined that the government is overly generous in offering incentives such as tax holidays, the land-cultivation permit (HGU) for up to 95 years, and the right-to-build license (HGB) for up to 80 years as stipulated in Government Regulation No. 12 of 2023.
"This policy can become a ticking time bomb. It can create new problems for the government," Trubus assessed.
Moreover, Indonesia will elect a new president next year, so the situation and dynamics will practically change. This includes the rules that apply in the current government leadership period. For example, Trubus elaborated, HGU which is initially granted for up to 95 years may be shortened.
"It's okay to build [IKN]. But, it's better for the government to be patient. Just develop it step by step," Trubus said.
The government is aggressively promoting a number of incentives to lure investors to the new capital city project. When attending Ecosperity Week 2023 held in Singapore, President Jokowi said he had prepared fiscal incentives, including tax holidays, non-collected VAT, super deduction tax, and import duties.