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Indonesia issues new tax holiday scheme
The government has issued a Finance Ministerial Regulation on the expansion of the business sectors that are eligible to apply for the tax holiday scheme, which is one of the three policies outlined in its latest economic policy package.
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Secretary to the Coordinating Economic Minister Susiwijono Moegiarso (Kompa/File)
T
he government has issued a regulation on the expansion of the business sectors that are eligible to apply for the tax holiday scheme, which is one of the three policies outlined in its latest economic policy package.
The digital economy industry as well as manufacturing industry in agriculture, forestry or plantations are the two sectors eligible to apply for a tax holiday in Finance Ministerial Regulation No. 150/2018, which now include 18 business sectors, up from 17 sectors in the previous regulation.
With the expansion of the scheme, as many as 169 business units listed in the Indonesian Standard of Industrial Classification (KBLI) were eligible to apply for the tax holiday, up from 153 business units previously.
The government has also lowered the minimum investment required to get a tax holiday – popularly known as a “mini tax holiday”, allowing a minimum investment of Rp 100 billion (US$6.97 million). Under the mini tax holiday scheme, the investor gets a 50 percent corporate income tax cut for five years.
The arrangement complements the existing scheme, which grants a full corporate income tax exemption for between five and 30 years, depending on the investment value.
Secretary to the Coordinating Economic Minister Susiwijono Moegiarso said the new tax holiday scheme was already integrated into the government’s Online Single Submission (OSS) system, a web-based licensing system launched in July.
“As of today, we can make sure that the business units [included in the latest tax holiday] are already input into the OSS,” said Susiwijono in Jakarta on Thursday, adding that the finance minister would also issue a regulation on tax holidays for investments in special economic zones (SEZs). (bbn)
