The new land rental rate in Batam will be reviewed

JAKARTA. Coordinating Ministry for Economic Affairs finally take a stance over the increase in rental rates of land in Batam that sparked criticisms from employers. According to the plan, the Ministry will review the increase in rental rates of land in Batam that is known as the annual authority preemie charge (UWTO)

Coordinating Minister for Economic Affairs Darmin Nasution said that the UWTO rise was driven by the result of the audit of Supreme Audit Agency (BPK) in 2013. The result of the audit stated that the tariffs of UWTO need adjusments. On his statement, Darmin added that the government will review the policy. He added that the land is an investment factor, which should be cheap.

Therefore, the land rental rates will just take effect after the review has been completed. Nasution also promised to discuss the problem with Minister of Finance and invite all related parties to conduct dialogue.

Darmin also stressed that Batam is an area that was really designed to be a symbol of regional development in Indonesia since 45 years ago. Hence, the government will find a solution that could be beneficial for all stakeholders.

Chairman of Batam branch of Association of Indonesian Employers (APINDO) Cahya said that during the meeting between Darmin and entrepreneur, government has promised to review the policy. Furthermore, the government also promised to discuss about the revision on Ministry of Finance Regulation No 148/2016 on Public Service Agency Service Rates of Batam Free Trade Zone and Free Port Authority.

Need a limitation

Related to the revision, the entrepreneurs asked Batam Industrial Development Authority (BP Batam) to set a limitation in increasing the tariffs of land lease in Batam. "To be measurable, the increase should be limited, for example, at maximum of 100%," said Cahya.

As an information, in accordance with the mandate of Ministry of Finance Regulation No 148/2016, BP Batam on 18 October released the Head of BP Batam Regulation No 19/2016. Under the regulation, the tariff on land lease or the annual authority preemie charge (UWTO) for terms of 20 years and 30 years have sharply increased. For an example, the extension tariff of land lease in Batam Center for a term of 30 years increased by 372% from only Rp 70,500 per meter square to Rp333,000 per meter square.

Meanwhile, the tariffs of land lease for apartment in the area also increased by 467% from Rp 51,250 per meter square to Rp 290,900 per meter square.

(Muhammad Farid/Translator)