Nusantara Capital Incentive Opens Tax Avoidance Chance

JAKARTA. Tax incentive policies in the Nusantara Capital (IKN) open up tax avoidance loopholes.

The incentive in question is the tax holiday facility or exemption of income tax for up to 20 years, for Financial Service Institutions (LJK) or financial centers located there.

According to Purwitohadi, a senior policy analyst at the Fiscal Policy Agency (BKF) of the Ministry of Finance, the tax avoidance loophole arises because there is no clear definition of foreign tax subjects who place their funds in the financial center in IKN.

Meanwhile, the provision governing the provision of tax incentives in IKN is contained in Government Regulation (PP) No. 12 of 2023. Purwito explained that foreign parties who place their funds in the IKN financial center will receive the facility.

"That (definition of foreign tax subjects) is one of the things we are discussing so that it does not become a means of tax evasion," he said.

In general, PP 12 of 2023 offers 10 tax incentives for parties interested in participating in the development of IKN, including:

1. Tax holiday
2. Super deduction of vocational activities
3. Super deduction of research and development activities
4. Super deduction of donations
5. 0% final income tax for companies with revenue below IDR 50 billion
6. Government-borne Income Tax Article 21
7. Income Tax facility for financial center
8. Income Tax facility for the relocation of the head office
9.  VAT and STLG facilities
10. Customs and excise facilities

For information, the statements were conveyed by Purwitohadi as a speaker at a tax seminar organized by the Faculty of Administrative Sciences, Universitas Indonesia (FIA UI) on Friday, October 13.

The seminar, which carried the theme "Optimizing the Development of Nusantara Capital, How about the Tax Policy?", was also supported by other speakers with a background in practitioners and academics, and moderated by the Tax Dispute Director of MUC Consulting Shinta Marvianti. (ASP/KEN)