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Tax holiday not luring investors to metalworking, machinery, says GAMMA
The head of the metalworking and machinery association suggests gathering feedback from businesses on post-COVID market conditions to ensure that the incentives benefited the targeted industries as intended.
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A backhoe loads coal onto dump trucks on Jan. 17, 2022 at a terminal managed by PT Karya Citra Nusantara (KCN) at Marunda Port in Cilincing, North Jakarta. (AFP/Adek Berry)
T
he metalworking and machinery industries are not benefitting from a government tax incentive introduced years ago, says the Association of Indonesian Metalworking and Machinery Companies (GAMMA).
GAMMA chairman Dadang Asikin said businesses rarely took advantage of the tax holiday, which was intended to boost new capital investment in 17 pioneering industries, including metalworking and machinery.
“I do not know if this is because of an arduous application process or because there is little to no innovation in industrial goods,” said Dadang, as quoted on Wednesday by Bisnis.
He was referring to Finance Ministry Regulation (PMK) No. 150/2018 on corporate income tax reduction, which grants companies in the 17 industries a reduction of either 50 percent or 100 percent in corporate income tax for a minimum capital investment of Rp 100 billion or Rp 500 billion, respectively.
Read also: Investment up 21.6 percent in third quarter
Dadang suggested the government to consider providing incentives to expedite research and development activities in the two industries to improve the competitiveness of local metalworking and machinery manufacturers.
“Several metalworking products, especially those related to customization, depend heavily on endless research and development as well as value engineering,” he explained.
