The government has issued a new regulation on incentives through Government Regulation No.78/2019 concerning income tax facilities for investment in certain business fields and in certain regions - Photo: Privacy.

JAKARTA (TheInsiderStories) – Indonesian government give more stimulus for investors by issued a new incentives through Government Regulation Number 78 of 2019 concerning income tax facilities for investment in certain business fields and in certain regions. Through the rules, the government is adding incentives for 183 sectors from the previous 145 sectors.

The new rule is a revision of Government Regulation Number 18 of 2015 and Number 9 of 2016. In the new regulation, the number of certain business sectors entitled to get facilities increased to 166 business sectors.

While certain business sectors located in certain regions have shrunk to 17 business sectors. The incentive provided in the form of a reduction in net income by 30 percent of the total investment in the form of fixed assets including land which is charged for six years by 5 percent a year.

The government also added a compensation if the investors experienced loss longer than five years and additional compensation for one year to all investments in all attached business sectors. It included in industrial and bonded zones, new and renewable energy sector accompanied by incurring economic infrastructure costs and social activities in certain business locations.

All the investment has nominal value of Rp10 billion (US$714,285), use of raw materials or at least 70 percent of local component in the second tax year, according to the revised rule. Earlier, the loss compensation for one year was only given to investments in industrial and bonded zones and use of local components at least 70 percent since fourth year.

The government also provided additional compensation for up to two years for investment which added at least 300 Indonesian workers and maintained the number of workers for four consecutive years since get an approval the income tax incentive.

The requirement is lighter compared to the previous regulation where compensation for losses for 1- 2 years only given to investors who employ at least 500 Indonesian workers for five consecutive years.

In the new bill, the taxpayers are enough to access the Online Single Submission in order to take care of requests for income tax facilities and other facilities such as acceleration of depreciation and amortization, the imposition of income tax on dividends of 10 percent, and compensation for losses.

US$1=Rp14,000

Written by Lexy Nantu, Email: lexy@theinsiderstories.com