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Jakarta Post

New regulation to reduce red tape for tax incentives

  • News Desk

    The Jakarta Post

Jakarta   /   Fri, March 9, 2018   /   11:09 am
New regulation to reduce red tape for tax incentives Coordinating Economic Minister Darmin Nasution (JP/Wienda Parwitasari)

The government is making a stringent effort to simplify the process for investors to obtain tax allowances and tax holidays, assuring that an upcoming regulation would be simpler and offer more certainty.

“We are preparing a new regulation that will be simpler, no lengthy red tape anymore,” Coordinating Economic Minister Darmin Nasution said on Thursday in Jakarta as reported by

The new regulation would contain specific provisions for each industry, but in general, investors would be required to establish “greenfield industries”, opening business in special economic zones, said Darmin.

Industries that were eligible for the tax holiday would be determined by the Indonesian Standard of Industrial Classification (KBLI), Darmin said, adding that the tax holiday was zero percent.

“So for those who intend to apply [for the tax holiday], we will not discuss the industry, but refer directly to the KBLI [...],” he said. The incentive would be awarded once an investor had obtained a KBLI number.

Separately, Finance Minister Sri Mulyani Indrawati said the government would use a variety of tax instruments to encourage economic growth, including tax allowances and tax holidays for income tax deductions.

Sri Mulyani said the government was reevaluating the procedure for granting tax incentives because very few businesspeople were interested in applying for the facility. (bbn)