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Jakarta Post

Jobs law offers tax incentives to attract investment

  • Dzulfiqar Fathur Rahman

    The Jakarta Post

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Jakarta   /   Tue, October 13, 2020   /  08:28 am
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Tax officers wear masks and face shields as they work at the Surakarta Tax Office in Central Java on June 15. (Antara/Mohammad Ayudha)

The government is hoping that the new tax incentives introduced in the recently passed Job Creation Law help to grow the economy by attracting more investment and creating jobs. The Finance Ministry’s Fiscal Policy Agency head, Febrio Kacaribu, said Monday that the new incentives, in addition to the ones offered in Law No. 2/2020, could make Indonesia’s tax regime more competitive globally. The jobs law eliminates income tax on dividends earned in Indonesia and on certain income, including dividends earned abroad, as long as they are invested in the country. It also introduces 10 percent value-added tax (VAT) on coal and relaxes administrative sanctions and taxes for foreigners with certain expertise. The provisions in the omnibus law aim to complement several regulations in Law No. 2/2020, which was issued earlier this year to gradually lower the corporate income ta...