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Govt’s generous tax incentives for HR development get little response
Under the tax incentive program issued in 2019, companies that provide training programs or internships can offset up to 200 percent of the funds they spend on the activities against their taxable gross income
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Starbucks Indonesia, in cooperation with the PJI youth organization, held an entrepreneurship training program for students in Surabaya, East Java in July 2019. The government has provided generous tax incentives for companies willing to provide internship and training programs. (Courtesy of Starbucks/-)
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government program to provide generous tax incentives to companies willing to provide internships and training programs has received little response from business players.
The Taxation Directorate General's regulations director, Yunirwansyah, said only 13 companies, mostly involved in heavy machinery manufacturing in East Java, had registered for the program by the end of 2019.
“All 13 companies have had agreements with local vocational schools and the training program,” he told The Jakarta Post during a tax deduction information event in Jakarta on Tuesday.
He added that the data were made available from local tax office reports and that the office might see more applicants in April when people turn in their tax return forms.
Yunirwansyah also said that since the tax deduction registration was done through the online single submission systems, there might be more companies that have applied for the program since the start of the year.
As part of the tax incentives issued on June 25 through Government Regulation No. 45/2019, companies that provide training programs, internships and/or educational activities to develop human resources based on a certain competency can offset up to 200 percent of the funds they spend on the activities against their taxable gross income.
Under the same regulation, companies that conduct research and development (R&D) in Indonesia are allowed to offset up to 300 percent of the cost of their R&D against their taxable gross income. Such deductions would significantly reduce their tax payments.
