Research funds exempted from tax

The government will no longer impose tax and non-tax fees on research funds donated to universities and private research institutions, a minister says.

Coordinating Minister for the Economy Hatta Rajasa said Friday the policy was expected to encourage Indonesian scientists and scholars to conduct researches and generate innovation in the wake of a tough global competition.

“In order to win the economic competition Indonesia must create innovation. That will require an aggressive development of research,” said Hatta, who is former research minister.

He added that private sector could claim tax reduction if they invested in research, while state universities would not have to return extra income from research to the state.

“The extra income must be used to fund future researches. Research institutes or private companies that employ research and development staff will be given more facilities to conduct studies,” Hatta said.

The government, he added, is preparing a national innovation committee that will give advice to the President upon or without request regarding research development. “With assistance from the committee we expect to determine three or four fields of research which Indonesia can excel. For that reason all research centers and RD within private and government institutions must work together,” he said.

The formation of the committee was recommended during the three-day cabinet meeting in Tampaksiring, Bali, early this week.

President Susilo Bambang Yudhoyono said the government would also establish the National Economic Committee to bolster local industries.