CMEA Darmin Nasution Give an explanation on XVI Economic Policy Packages at the State Palace (16/11) - Photo by CMEA Office

JAKARTA (TheInsiderStories) — Indonesia’s ugly current account deficit (CAD) has made government put on thinking cap. To improve the deficit, government obliged Foreign Exchange Revenues from export to be placed in Indonesia’ Financial System.

The regulation will be implemented to natural resources such as mining, agriculture, forestry, and fisheries, with bigger export value than import. Outcome of these exports must be put in bank’s special account, in Rupiah or US Dollar. And those who do not follow, will get administrative sanction.
While, to attract investment to Indonesia, government extended tax holiday to 18 sectors, such as upstream metal, petrochemical, auto components, and so on. Besides, coverage of agricultural, plantation or forestry-based processing industries, also digital economy are broadened.
In detail, company with Rp500 billion (US$34.13 million) to Rp1 trillion investment can get income tax cut for five years. While Rp1 trillion to Rp1.5 trillion investment will receive income tax cut for seven years.
Moreover, Rp5 trillion to Rp15 trillion investment may get 10 years of tax cut. Then Rp15 trillion to Rp30 trillion investment will earn 15 years of income tax cut. And above 30 trillion Rupiah investment will obtain 20 years income tax cut.

All these tax holidays are 100 percent income tax cut. After tax holiday period ends, there will be another tax cut by 50 percent.

Indonesia government also assigned mini tax holiday for Rp100 billion to Rp500 billion investment, a 50 percent tax cut for 5 years.

Moreover, for special economic activities, there will be 5-20 years full income tax cut for investment above Rp100 billion. Whilst, investment valued Rp20 billion to Rp100 billion, may get 50 percent tax cut for five years.

The tax holiday is considered able to increase investment and strengthen upstream to downstream industry.

US$1: Rp14,700

Written by Staff Editor, emali: theinsiderstories@gmail.com