Wednesday, January 26, 2011

Public private partnership projects can get tax holiday

JAKARTA. There is exciting news for potential investors of infrastructure projects with joint funding scheme, aka the government and private public private partnership (PPP).
Deputy of Infrastructure Ministry of National Development Planning (VAT) / Bappenas Dedy Priatna say, almost all infrastructure projects of government and private cooperation has great potential for the stimulus package of income tax exemption for a specified period or tax holidays.

The potential was raised after the government issued Government Regulation (PP) No. 94 Year 2010 on Taxable Income Calculation and Payment of Income Tax in Current Year. The rules, published late December 2010 that provides the legal basis for the Minister of Finance to issue a tax exemption facility within a specified period (tax holiday).

But according to Dedy, currently out of five PPP projects that will be tendered the government this year, new projects Steam Power (power plant), Central Java are certainly going to get the tax holiday facility. The value of this project reaches U.S. $ 3 billion (see box). As for other PPP projects Dedy not sure whether to get a tax holiday facilities.

Investors are increasingly interested

"This policy is necessary to attract and encourage investors into other sectors or projects that had not been much demand and high risk, such as utilization of geothermal energy or geothermal," said Ded last weekend.

For your information, other than power plant in Central Java, other PPP projects that will dilego government this year is the project ampo Land Port, Bali U.S. $ 30 million, rail projects Manggarai Soekarno-Hatta worth U.S. $ 735 million. Then the toll road project in Medan-Kuala Namu airport U.S. $ 475 million, as well as drinking water project in East Java Umbulan worth U.S. $ 200 million.

Dedy rate, the new policy on sector-related taxation of income tax relief for prospective investors are going to be a stimulus and attract investors to invest in Indonesia. "Obviously going to attract investors because of this logic, taxes related to production costs. If charged at the beginning they (investors) when the investment will build here, it will not be competitive. If acquitted, there are advantages for them," said Dedy length.

He is optimistic, the new policy or regulation in the taxation sector will provide a fresh breeze to prospective investors. Therefore, this policy has been long awaited by owners of capital, especially foreign investors.

However, Dedi agree that not all infrastructure projects should get a stimulus package of tax holiday. Therefore, the income still minimal, but growing expenditure needs. "So the necessary selection and thorough consideration," he added.

Earlier, Finance Minister Agustin Martowardojo said, the government will only provide tax holidays for pioneer industries with the five criteria, namely creating great jobs, bringing new technology into small areas and underdeveloped. In addition, the project also must be able to add value to other industries and the Indonesian economy at large.

Chairman of the Chamber of Commerce and Industry (Kadin) of Monetary, Fiscal and Public Policy Haryadi Sukamdani also said the policy agreed tax holiday will make investors interested in investing directly in Indonesia.
Source : Kontan Online

1 comment:

  1. Hello,

    Excuse me, how can I contact the blog author? I have question about Indonesian tax system. Could you please be so kind and answer? My email is - could you please email me, ok?

    Thank you very much.