Kedutaan Besar Republik Indonesia
Embassy of the Republic of Indonesia
Ambassade de la RÉpublique d'Indonésie

Indonesia prepares four fiscal incentives to boost investment

Finance Minister Sri Mulyani Indrawati has saidA�several regulations are being revisedA�to provide more tax incentives to businesspeople interested in investing in the country.

She said in Jakarta on Tuesday that the four incentives were in the form of tax allowances, tax holidays, tax deductions for small and medium enterprises (SMEs), as well as incentives for companies that carried our research and development (R&D) activities.

On tax allowances, Sri Mulyani said the government would expand the number of business sectors that would be eligible for the incentives, including income tax deductions.

She said the expansion plan was based on an instruction issued by President Joko a�?Jokowia�? Widodo and recommendations from a number of ministries.

a�?The business sectors that will receive the tax allowance will be announced after the revision of the finance ministerial regulation,a�? said Sri Mulyani as quoted byA� after a limited Cabinet meeting on investment at the Presidential Office, adding that Jokowi had called for simpler procedures to obtain the incentives.

She said the second incentive was a tax holiday in which the government would offer income tax deductions of between 10 and 100 percent.

The third incentive is related to tax deductions for SMEs, said Sri Mulyani, adding that her ministry needed to revise Financial Ministerial Regulation No 250/1995 on SMEs to accommodate the incentive.

The fourth fiscal incentive are income tax deductions of up to 200 percent for companies carrying out R&D activities, she added. (bbn)