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Govt mulls tax incentives for corporate training to boost labor skills
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Industry Minister Airlangga Hartarto delivers remarks during the launch of the “Link and Match” vocational program in Surabaya on Feb. 28. (Courtesy of/Industry Ministry)
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ndustry Minister Airlangga Hartarto said he has been in discussions with the Finance Ministry to provide tax deductions for corporate training fees and a five-year tax allowance for firms that build polytechnics to partake in training Indonesian workers.
“[We plan to make] training fees tax deductible and for those who build polytechnics, we’re considering a five-year tax allowance,” he said during the launch of the “Link and Match” vocational program attended by Vice President Jusuf Kalla on Tuesday.
The idea is part of the government’s efforts to involve firms in building Indonesia's human resources amid a demographic boom. By 2025 Indonesia's population is projected to reach 285 million, 69 percent of whom would be at a productive age of between 15 and 65 years old.
To anticipate the demographic bonus, President Joko “Jokowi” Widodo has instructed the Industry Ministry to train 1 million people with practical skills in the manufacturing sector from 2017 to 2019.
The ministry launched a “Link and Match” vocational program that allows government to link vocational schools (SMK) and industries across the archipelago to address the lack of skilled workers, a problem that hampers the development of some industries.
The program will be held in all provinces across Java this year before touching on other provinces in the next two years. (ags)
