Tax incentive scheme to be expanded to cover more sectors

06-Dec-2019 Intellasia | JakartaPost | 6:02 AM Print This Post

The government will expand its tax incentive programme to cover more business sectors as part of its efforts to attract investment.

Government Regulation No. 78/2019, which has been signed by President Joko “Jokowi” Widodo and will come into effect on December 13, will increase the number of sectors in which businesses are eligible to apply for the tax allowance scheme from 145 to 183, including 17 sectors located in certain areas of the country.

Agriculture is among the sectors included in the expanded regulation, with producers of select commodities such as corn, soybeans, fish and traditional medicines to be eligible for the tax incentives.

The incentives will also be provided for those seeking to expand or establish businesses that manufacture goods for export as well as those seeking to establish businesses that have high investment value, use high levels of local content and provide significant levels of employment.

The new regulation only expands the sectors eligible for tax incentives, while the incentives themselves remain unchanged. The incentives include a 5 percent tax reduction on fixed assets for six years.

The income tax rate for foreign taxpayers that do not have a permanent establishment (BUT) in the country has also been set at 10 percent based on an existing agreement on preventing double taxation.

The government will also offer compensation for loss of earnings for eligible businesses for a period of five to 10 years. An additional one year of compensation will be provided if businesses meet certain criteria, such as investing in industrial zones, investing in renewable energy, or employing at least 300 local workers and maintaining that number for four straight years, among other conditions.

The finance ministry Taxation directorate general said in a statement that interested taxpayers could apply for the incentives via the online single submission (OSS) system.

“Taxpayers can apply [for the incentives] online through the OSS system and approval will be issued within five days. If the OSS system is not ready, an application can be filed offline to the BKPM [Investment Coordinating Board] head, as stipulated in the BKPM regulation,” the statement read.

https://www.thejakartapost.com/news/2019/12/05/tax-incentive-scheme-to-be-expanded-to-cover-more-sectors.html

 


Category: Indonesia

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