This regulation strives to encourage local companies to collaborate with vocational high schools, vocational colleges and job training centers to empower students through internship programs, apprenticeships or skills-specific development programs. Through such collaboration, companies can help create a generation of high-quality, skilled workers that meet the demands of businesses and industries for competent human resources now and in the future.

On the side of businesses, all expenses incurred through their collaboration with vocational institutions can be fiscally recognized as company expenses, thereby reducing their gross income. The government even increases these vocational training expenses by up to 200 percent, so businesses can benefit from tax savings and might not even have to pay income tax.

Impressive, isn’t it?

However, the reality is that only 74 out of 3.5 million corporate taxpayers, or a mere 0.002 percent, have utilized this facility since the policy was issued, even though obtaining this fiscal incentive is straightforward.

Companies only need to fill out an application form on the Online Single Submission (OSS) website oss.go.id, operated by the Capital Investment Board, and submit two documents: a copy of its cooperation agreement with the vocational institution and a copy of its fiscal certificate, obtained from a registered tax office. Once the verification process confirms that the application is accurate and complete, the OSS will issue an notification of approval and the company can use the vocational super tax deduction facility of a maximum 200 percent.

So why is this generous tax incentive underutilized?