Government Waives Employee Income Tax at IKN

JAKARTA. To encourage the project of relocating the national capital, the Government exempts employee Income Tax  Article (ITA) 21 in the Nusantara Capital City (IKN). 

Quoting Bisnis.com, by providing this incentive, the government hopes that IKN will become busier and more people will choose to work and even live there.

According to Expert Staff to the Minister of Finance Yon Arsal, this program is not only intended for civil servants but also private employees. The incentives will be provided with an income tax mechanism borne by the government.

Yon said the provision of ITA 21 incentives will be valid until 2035. "If someone has moved, the regulation will apply immediately, if there are already employees," said Yon.

In addition to providing ITA 21 incentives borne by the government, several incentives have also been provided by the government to encourage development in IKN.

The provision of incentives is contained in Government Regulation (PP) Number 17 of 2022 on Funding and Budget Management for the Preparations, Development, Relocation of the Capital City, and the Implementation of Special Administration of Nusantara Capital City.

Some of these include income tax exemptions for companies or tax holidays or tax reductions or tax allowances. Apart from tax incentives, the government also provides several facilities such as granting Rights to Cultivate (HGU) for up to 95 years and ease of licensing.