Jakarta. The government has decided to assign MNC Lido City, a resort megaproject owned by MNC Land, a Jakarta-listed property company controlled by media tycoon Hary Tanoesoedibjo, special economic zones, or SEZ for tourism, a status that came with various tax incentives and special tax facilities for any business involved in the project.
The estimated $2.4 billion MNC Lido City project comprises 3,000 hectares of land in Bogor district in West Java, which would be developed into an integrated complex of residential, commercial, theme parks, and resorts.
MNC Land and the Trump Organization, controlled by the United States' 45th president, Donald Trump, signed an agreement in 2015 for the latter to operate two resorts, including one in Lido and another in Tanah Lot, Bali.
As the project was now an SEZ, the companies would likely enjoy waivers for income tax (PPh), value-added tax (PPN), sales tax on luxury goods (PPnBM), import duties, excise, and various other licensing facilities.
According to a 2020 Finance Ministry Regulation about Tax, Excise and Duties Facilities for SEZ, a company investing more than Rp 1 trillion ($71.5 million) in the special zone is legible for not paying income tax for 20 years, among other tax breaks.
"Lido SEZ is expected to encourage tourism in Indonesia. And the goal must be clear, tourists to West Java must be of international level," Coordinating Minister for the Economic Affairs Airlangga Hartarto, who is also the chairman of SEZ National Council, said in a statement on Friday.
"The project must also be a premium one, so the foreign exchange [revenue] is also high," Airlangga said.
Coordinating Ministry for Economic Affairs estimated that Lido SEZ would attract up to $ 2.4 billion to the projects. The project would also generate a net inflow of $4.1 billion in foreign exchange over the next 20 years, comprising the money spent by the foreign tourists and savings from domestic tourists who opt not to go abroad and, instead, spend their vacation at the resort.
Located about 60 kilometers from Jakarta, MNC Lido City can be reached in one hour using a toll road from the capital.
MNC Land said in a statement that MNC Lido City construction kept progressing amid the Covid-19 pandemic. The company was now working to build a theme park called MNC World Lido and the Luxurious International Resort, Golf Club & Residences Lido, designed by Oppenheim Architecture, HBA, and EDSA.
Former world number one golfer Ernie Els designed the International Golf Club Lido, which would feature an 18-hole PGA standard championship golf course, with a sweeping panorama of Mount Salak and Mount Gede-Pangrango.
Coordinating Ministry for Economic Affairs said it hoped MNC Lido City would help Indonesia increase the number of tourist visits to 63.4 million per year people by 2038 or an average of 3.17 million tourists per year.
Indonesia saw 16.1 million foreign tourists visited the country in 2020 before Covid-19 cut the numbers by 75 percent to just 4.02 million last year. The country lagged behind its neighbors Thailand and Malaysia, which attracts about 40 million and 26 million foreigners, respectively, per year.