The Jakarta Post
The government is revising a regulation on tax holidays to increase the number of beneficiaries that are eligible for the fiscal incentives.
Under Finance Ministry Regulation No. 35/2018 on the investment coordinating board and Finance Ministry Regulation No. 5/2018 on tax holidays, only 17 pioneer industries can benefit from the tax holiday.
Investment Coordinating Board (BKPM) facility service director Endang Supriyadi said in Jakarta on Thursday that the 17 pioneer industries covered 153 beneficiaries – 151 industrial manufacturers and two infrastructure providers (electricity generation and toll roads).
The prevailing tax holiday regulation was only issued on March 29 with the objective to simplify procedures for investors to get the tax incentive, but the regulation failed to attract more investors availing themselves of the tax holiday.
“We plan to expand it to all sectors, including services that own large assets. Currently the minimum investment to get the tax holiday is Rp 500 billion (US$33.73 million),” said Endang, as quoted by kontan.co.id, adding that the expansion of the tax holiday coverage was expected to attract more investors.
The official said the government was discussing the detailed list of additional industries and businesses that could benefit from the fiscal incentives.
BKPM deputy for investment supervision Azhar Lubis said only four companies had been recommended for the tax incentive – one renewable energy company and three petrochemical companies.
Coordinating Economic Minister Darmin Nasution said the tax holiday regulation needed to be revised, because a number of important sectors were not included as beneficiaries of the incentive. (bbn)