New Indonesian Tax Incentives To Boost Investment

By Ahmad Fuad Yahya JAKARTA, Jan 6 (Bernama) -- The Indonesian government has launched new incentives in the form of tax allowances covering 129 business sectors in a move to boost downstream investment. The sectors -- plantation, mining, real estate, electronics, pharmacy and food -- are seen as crucial to developing the under-invested downstream industry. The tax allowance will reduce taxable income to 30 per cent of the total investment carried over six years, accelerate depreciation and amortisation, impose income tax of up to 10 per cent for offshore taxpayers, and carry forward losses from five to 10 years, The Jakarta Post reported on Friday. "The impact on investment will be positive. This is a great signal for businesses to up their activities," Indra Darmawan, director for investment deregulation at the Investment Coordinating Board (BKPM) told the daily. The investment board has targeted Rp283.5 trillion in direct investment this year, up more than 18 per cent from the Rp240 trillion (US$26.66 billion) targeted for 2011. Tax allowance is different from the tax holiday, which gives five to 10 years tax breaks in five industrial sectors -- base metal, oil refining, petrochemicals, renewable energy and telecomunications equipment. They will enjoy the tax holiday if their investment is worth at least Rp1 trillion. -- BERNAMA Malaysia indonesia