Fiscal Incentive Attracts Investment

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October 5, 2018

Jakarta – Minister of Industry Airlangga Hartarto has said fiscal incentives are needed to attract investment and spur industrial growth.

“Fiscal incentives are needed as an effort to encourage investment and increase the growth of the manufacturing sector,” Airlangga said in a statement received by Antara on Sunday, September 30th 2018.

According to him, the spirit of national industry players to expand their business is strengthened because they are supported by pro-business government policies. The minister pointed out that some of the incentives that entrepreneurs have been waiting for, including super deductible taxes and regulations related to sales tax on luxury goods.

“The super deductible tax incentive will be given to industries which get involved in vocational education programs as well as carry out research and development (R & D) activities to produce innovations,” he explained. The Ministry of Industry has proposed a super deductible tax scheme to the Ministry of Finance.

Industries that hold vocational training and educational programs will get a tax reduction of 200 percent, while those that conduct R & D activities or make innovations will get a tax deduction of 300 percent. The implementation of the super deductible tax is in line with the initiatives mentioned in the Making Indonesia 4.0 roadmap.

“This means that in addition to tax allowance and tax holiday fiscal incentives, the facilities which are provided to industries will also accelerate the national manufacturing industry sector to face the 4.0 industrial revolution,” he explained.

Airlangga said the government would issue a mini tax holiday scheme for investors with an investment value of under Rp500 billion (about US$33.5 million). In this scheme investors will get an income tax discount of 60 percent.


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