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New tax amnesty rule directs funds to renewables, processing industries
Taxpayers who invest declared funds in certain industries pay lower tax on the repatriated assets.
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Headquarters of the Taxation Directorate General in Jakarta. (kontan.co.id/File)
T
he Finance Ministry has issued a new regulation to steer the proceeds of the second tax amnesty toward renewable energy development and certain processing industries.
Finance Ministerial Decree No. 52/2022 states that 332 such industries may receive more of the proceeds than others. These include geothermal power production, power generator manufacture, meat processing, furniture making, crude palm oil processing and ceramic manufacture.
“Right now, [funds] from the tax amnesty are very valuable as a new source of investment for national economic development,” said Finance Ministry spokesperson Neilmaldrin Noor in a statement on Tuesday.
The decree is a derivative of Finance Ministerial Regulation No. 196/2021 that offers lower tax rates of 6 to 12 percent on declared assets on the condition that they go either into government bonds (SBN) or direct investment in renewables or processing industries.
A higher rate of 8 to 18 percent is payable on declared assets that go into any other industries or financial instruments.
Neilmaldrin noted that the investments had to be made by September 2023 and with a minimal holding period of five years for the amnesty to apply. Taxpayers were also allowed to switch between investing in the 332 industries and investing in government bonds, under certain terms and conditions.
“This is purely business, so investors can decide which is more profitable,” he said.
