The Report Released, The 2022 Tax Expenditure Increase 4,4%

Thursday, 14 December 2023

The Report Released, The 2022 Tax Expenditure Increase 4,4%

JAKARTA. The Ministry of Finance's Fiscal Policy Agency (BKF) announced that Indonesia's tax expenditure in 2022 increased by 4.4% compared to 2021 to IDR 323.5 trillion. The amount equals 1.65% of Indonesia's Gross Domestic Product (GDP).

This was conveyed in the recently released 2022 tax expenditure report. The report contains the estimated amount of tax expenditure calculated based on tax policies issued by the government, especially tax incentives provided.

Several types of incentives are recorded as elements of tax expenditure such as facilities that are not payable or not subject to Value Added Tax (VAT).

Then the exemption of Income Tax, VAT, and Sales Tax on Luxury Goods (PPnBM). In addition, tax facilities are not collected, not required to collect, tax base reduction, tax credit facilities, tax rate reduction, and tax borne by the government (DTP) to reduce the tax base (DPP).

For example, the tax holiday facility or tax exemption for industry in 2022 is estimated to be only IDR 4.6 trillion, with details of tax holidays for pioneer industries amounting to IDR 4.6 trillion while tax holidays for special economic zones and industrial estates still have not been used.

The report also mentioned that these facilities have been provided to 18 industrial sectors, with the beneficiary subjects covering business activities ranging from Micro, Small, and Medium enterprises (MSMEs) and multi-scale to households. 

The provision of incentives is divided into four objectives, namely improving community welfare, developing MSMEs, improving the investment climate, and supporting the business world. (ASP/KEN)


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