Friday, September 17, 2010

Indonesia Tax Holiday apply Early 2011

JAKARTA: The Directorate General of Taxation expects tax incentives like tax holidays can already into force as of January 1, 2011 after investment rules and the rules of income tax (PPh) finished harmonized.

Director General of Taxation Mochammad Tjiptardjo said Minister of Finance has formed a special team to study the form of new incentives as required taxholiday resemble the business world.

To that end, the Law No.25/2007 on Investments with U ndang U ndang No.36/2008 on Income Tax (Income Tax) was in harmony to be able to decide the form of incentives in the new jak ideal pa.

"His team has been formed by the minister, again working. Later in time, when completed we will report what rich holidaynya tax forms, it is again assessed. His ideal his January 1 (2011) can be applied, "he said on the sidelines of the halalbihalal Ministry of Finance, yesterday.

According to him, the harmonization of the laws is necessary to remember in the Income Tax Act does not set the tax holiday in the taxation regime in Indonesia. Wherever possible, the government avoided the law revision because the process will take some time.

Tjiptardjo explain the Indonesian government is already providing various incentives for business activities in the country. Only the demands of tax holiday from the business world that until now could not be realized due to hit the taxation rules.

As is known, the government is preparing rules and non-fiscal incentives that are specific to large-scale investment. It is still being discussed internally within the government that involve a number of ministries / agencies, among others
Ministry of Finance, Ministry of Industry, and Investment Coordinating Board (BKPM).

Meanwhile, the Ministry of Industry (Kemenperin) suggests agro-based processing industries and capital goods industries will receive fiscal incentives being formulated by the government.

The existence of fiscal incentives is expected to attract investors to develop value-added industries (value added industry) rather than exporting it in the form of raw products. This step was intended to suppress the importation of capital goods which triggered Indonesia's trade deficit.

"Sector [which will be given incentives] as agro namely rubber, coffee and others, principally because of the labor intensive manufacturing industry should be lifted but the value added industry must also grow," said Minister of Industry, MS. Hidayat.

Source: Bisnis Indonesia
Date: 15 September 2010

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