18 Sectors Can Apply Tax Holiday to Indonesia Investment Coordinating Board

Posted On March 17, 2020

Jakarta, 17/02/2020 MoF – Minister of Finance Sri Mulyani Indrawati stated that the 2020 State Budget (APBN) is directed to support the achievement of development targets while remaining adaptive to face economic risks after the dynamics of economic and political uncertainty in 2019. One of them is the tax holiday for 18 sectors that can be submitted directly to the Indonesia Investment Coordinating Board (BKPM).

“The tax holiday has been renewed. Now the process is more certain, the areas and sectors that can get a tax holiday. We have conveyed 18 sectors that can directly apply tax holidays to BKPM. It has been delegated to BKPM,” stated the Minister at the Indonesia Economic and Investment Outlook 2020 event in the Nusantara room, BKPM, on Monday (17/02).

For information, the 18 sectors namely the pioneering industries include:

1. the upstream base metal industry;
2. oil and gas refining or refining industry;
3. petrochemical industry based on oil and gas and coal;
4. organic basic chemical industry sourced from agricultural, plantation or forestry products;
5. basic inorganic chemical industry;
6. the main pharmaceutical raw material industry;
7. industrial manufacturing of irradiated, electromedical or electrotherapy equipment;
8. machine manufacturing industry and main engine components;
9. the industry of making major components of electronic / telematics equipment such as semiconductor wafers, backlights for Liquid Crystal Display (LCD), electrical drivers or displays;
10. industrial robotics manufacturing components supporting manufacturing machinery manufacturing;
11. industrial manufacturing of the main components of electric power generation machines;
12. motor vehicle manufacturing industry and major components of motor vehicles;
13. ship’s main component manufacturing industry;
14. the main components of the railroad manufacturing industry;
15. the industry of making the main components of an aircraft, and aerospace support activities;
16. processing industries based on agricultural, plantation or forestry producing pulp;
17. economic infrastructure; and
18. The digital economy includes data processing, hosting, and activities related to it.

At the event organized by BKPM and Eurocharm Indonesia, he added, various incentives were also being developed and improved by the Ministry of Finance. Furthermore, the Minister of Finance also explained the Omnibus Law consisting of Taxation Ombinus Law and Cipta Karya Ombinus Law. He revealed that the President wanted a closer examination of the investment regime in Indonesia. Therefore, fundamental changes to the ease of doing business must also be made.

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In the Omnibus Taxation Law, 8 legal regulations are simplified in order to create competitive tax policies for regional and global.

The Omnibus Law Cipta Karya is designed to simplify regulations and provide certainty without compromising environmental standards and also the rights of workers. According to the Minister of Finance, there are still around seven million people who have not gotten a job and there will be two million new candidates every year who need jobs. With such conditions, Indonesia certainly needs investments that are able to open new jobs for the younger generation.

“I hope Euro charm can bring more European companies to invest in Indonesia, the country with the largest economy in Southeast Asia,” she said at the end of his speech. (mr/hpy/nr)

 

Source: Ministry of Finance Republic of Indonesia

Written by spacesconnectiOn

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