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Jakarta Post

Effective tax incentives to increase investment

  • Adelia Pratiwi
    Adelia Pratiwi

    Works for the Center of Macroeconomic Policy at the Finance Ministry’s Fiscal Policy Agency

Jakarta   /   Thu, July 11, 2019   /  10:29 am
Effective tax incentives to increase investment A building of the Directorate General of Taxation in Jakarta (

Tax revenue is very important for a country’s economic development. It creates what we call fiscal space that can increase the government’s ability to deliver development goals. However, as much as the government wants to use tax revenue to promote development objectives, it also gives incentives in the form of exemptions, deductions or credits to selected groups or activities. Governments have been using incentives extensively. Many countries even report their tax incentives and evaluate them to see if they effectively achieved predetermined objectives. Indonesia is among the countries that have yet to provide a comprehensive assessment on the impact of tax incentives. With a growing number of tax incentives given by the government, a comprehensive rethink of tax incentives schemes should be done. Although tax revenue is certainly very important, there seems to be no s...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.