Indonesia’s Financial Center to Offer Double Incentives, Moral Hazard Risks Loom
Indonesia is planning to establish an international financial center in Bali, potentially offering 100% corporate tax reductions to attract foreign investment. Economists have warned that such aggressive incentives could create moral hazard risks and suggest more moderate tax cuts.
Why it matters
The strategy reflects Indonesia's attempt to compete for global capital, though it highlights the tension between economic development and fiscal responsibility.
July 7, 2026 | 9:09 am SHARE URL berhasil di salin. President Prabowo Subianto greets his Belarusian counterpart Alexandr Lukashenko at the Merdeka Palace in Jakarta on July 2, 2026. (Antara Photo/Bayu Pratama S) Jakarta. Indonesia's upcoming international financial center will likely offer double incentives to attract foreign investors, although economists have warned about how the government should structure the special facilities.
The article balances the government's development goals with critical perspectives from independent economists.
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