Indonesia To Offer Tax Breaks To Exporters

by Mary Swire, Tax-News.com, Hong Kong

15 January 2003

Speaking at the weekend, Indonesia's Minister of Trade and Industry, Rini M. Soewandi announced that the government would be putting together a second package of tax incentives designed to boost the international competitiveness of the country's export sector.

According to a report in the Jakarta Post, the first package of tax measures, announced late last week, was primarily aimed at electronics manufacturers.

Although she declined to provide details of the specific tax incentives likely to be on offer, following a meeting with other senior economic ministers, the Trade and Industry Minister told reporters that:

'We're now in discussions with the Directorate General of Taxation to determine the next stage of the package. We're now assessing what kind of efforts on our part can be made to jack up exports.'

However, according to the Jakarta Post, Indonesian exporters have expressed disappointment at the move, arguing that although tax incentives will boost the sector's international competitiveness, other measures, such as a crackdown on the numerous illegal levies, a reduction in rapidly-increasing utility prices, and resolution of the country's lingering labour disputes would have been more effective.

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