Government Attempts to Get IDR 1,573 Tax Holiday Facility Investment Commitment

JAKARTA. The level of realization of investment commitments that get a tax holiday facility remains very low. The tax holiday is a corporate income tax reduction facility ranging from 50% to 100%, with varying durations depending on the investment value submitted by the taxpayer.

Quoting Bisnis Indonesia Monday (31/10) edition, from the investment commitments that have received facilities of IDR 1,708 trillion, only IDR 134.7 trillion has been realized. This means that the value of investment commitments that must be followed up by the Indonesia Investment Coordinating Board (BKPM) or the Ministry of Investment is IDR 1,537.3 trillion.

The government indeed does not set a definite target when the investment commitment must be realized by the taxpayer receiving incentives.

Land and Liquidity Factors

Head of BKPM/Minister of Investment Bahlil Lahadalia said that his party would develop a special program that would facilitate taxpayers who have not realized their commitments yet.

The existence of the facilitator is to assist taxpayers in overcoming obstacles in realizing their investment.

So far, BKPM noted that there are two main factors hindering investment realization. Those are the land issues and company liquidity.

Regarding land issues, one of the problems that are often complained of is the rampant action of the land mafia, thus driving up land prices in industrial areas. Meanwhile, the problem of liquidity faced by taxpayers, especially after the Covid-19 pandemic.