F

inance Minister Bambang Brojonegoro has announced that his ministry will introduce a new policy on tax holidays next week.

'€œA new regulation on a tax holiday will come out next week,'€ Bambang said on Thursday.

He said the new policy was designed to lure foreign investors that in turn would stabilize the economy within a shorter period.

Previously, Bambang said a revision of the prevailing tax holiday regulation would allow corporations to extend the length of their tax breaks to 20 years from the previous 10 years. The maximum 20-year extension will need comprehensive assessment or will be under the ministry'€™s discretion.

He said the number of businesses to benefit from a tax holiday would also be expanded. This will include firms working in the agriculture-processing industry, marine transportation, primary companies within special economic zones and infrastructure.

Companies operating in only five industries are eligible to tax holidays under the prevailing regulation. The five industries are: upstream steel, oil refinery, petrochemicals, engineering and communication.

Engineering and telecommunication companies with revenue of Rp 500 billion (US$36 million) to Rp 1 trillion will be given a maximum 50 percent discount. Companies with investments of more than Rp 1 trillion can receive up to 100 percent discount.