Income Tax Incentive

In the wake of the worsening global economic crisis, on Monday 6 October 2008, the government has issued a regulation to attract investors to do their business in Indonesia i.e Government Regulation No.62 Year 2008 regarding the Amendment of Government Regulation No.1 Year 2007 regarding Income Tax facility for Investments on certain Business Sectors and/or certain Location. The number of Business Sectors that will get the Income Tax Incentive has been increased from 15 to 23 Business Sectors. While the number of Location for Investment has been increased from 9 to 15 locations. The Income Tax Facility consists of 30% deduction of Nett Income Tax for the investment period of 6 years i.e 5% a year; expedited devaluation & amortisation; Income Tax on Devidents paid to foreign tax subjects of 10%; and loss compensation for the period between 5 and 10 years. This regulation also offers Income Tax Incentive for Cement Factory that has been devastated by the Tsunami since 1 January 2005.
An official of the Coordinating Minister of Economy Mahendra Siregar stated that the government will keep on improving the Investment Climate by issuing various policies and actions. Previously, on Sunday 5 October, the Ad Interim Coordinating Minister of Economy Sri Mulyani has stated that the government will stick to its current policies set forth in the Presidential Instruction No.5 Year 2008 regarding Economic Programm Focus for the year 2008-2009, as well as other specific policies.