Indonesia To Offer Tax Holidays To Investors

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

27 April 2010

Indonesia’s Industry Minister, M S Hidayat, has disclosed that the Finance Ministry have agreed with the Investment Coordinating Board to offer investors a tax holiday in order to increase the likelihood of meeting the country’s investment targets.

The government has set a target of IDR10,000 trillion (USD1.1 trillion) of additional investment in Indonesia in the next five years, of which it is hoped that 50% will come from the private sector, either from internal or overseas sources.

The actual terms of the proposed measure are still to be agreed, but it is said that the period of exemption from corporate income tax is likely to be five years, and that it would probably be offered on a case-by-case basis to a select number of industries providing added-value to the economy.

Further meetings are to be held to work out the precise details of the incentives for prospective investors. The Finance Ministry is reported to be requiring that the policy is strictly targeted, as it believes that the corporate sector already receives various fiscal and non-fiscal advantages.

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