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

Government to grant 20-year tax holiday to investment above Rp30 trillion

Jakarta (ANTARA News) – The Indonesian government is to grant 20-year tax holiday in the form of corporate income tax-free incentives to investment worth more than Rp30 trillion in pioneer industry, a Finance Ministry official said.

“Under the finance minister`s new regulation, investment valued above Rp30 trillion can obtain tax holiday for 20 years,” Head of the Fiscal Policy Board at the Finance Ministry, Suahasil Nazara said here on Thursday.

He said the revision of the finance minister`s regulation on tax holiday also deals with the levels of investment commitments and corporate income tax-free incentives.

In addition to investment worth more than Rp30 trillion, investment valued at Rp500 billion to Rp1 trillion and investment valued at Rp1 trillion to Rp5 trillion can also be granted the incentives for five years and seven years respectively, he said.

The incentives can also be granted to investment worth Rp5 trillion to Rp15 trillion for 10 years and investment worth Rp15 trillion to Rp30 trillion for 15 years.

“Unlike in the past, the finance minister`s new regulation explicitly sets the value of investment which deserves tax holiday for a certain period of time,” he said.

Besides the 20-year incentives, investment valued at more than Rp30 trillion can also be granted corporate income tax-free facilities for another two years at 50 percent based on the result of evaluation, he said.

He said the government is not worried about losing tax receipts from the granting of the taxation incentives as it will receive extra taxes after the investment is made.

“We will only lose corporate income tax, however, the investors will continue to pay income tax on employees, value added tax and so on,” he said.

The finance minister is expected to issue a regulation on the revision of tax holiday next week, along with government regulation on the revision of tax allowance.

Reported by Satyagraha

Editor:A�Heru Purwanto