Government Reviews Government-Borne Corporate Income Tax Incentive of 10% for Tourism Sector

Sunday, 28 January 2024

Government Reviews Government-Borne Corporate Income Tax Incentive of 10% for Tourism Sector

JAKARTA. The government revealed plans to provide incentives for the tourism sector in the form of a 10% government-borne Corporate Income Tax. Thus, if this policy is implemented, corporate taxpayers in the tourism sector will only be taxed at 12%, from the current general rate of 22%.

Quoting, this policy is still in discussion within the government, which includes the Coordinating Ministry for Economic Affairs and the Ministry of Finance.

In the discussion, the Ministry of Finance was represented by the Directorate General of Taxes, the Fiscal Policy Agency and the Directorate General of Fiscal Balance. 

However, the government has not yet revealed how much impact this policy will have on the government's fiscal. This is because the discussion is still ongoing.

Limited Facilities

While quoting, not all taxpayers engaged in the tourism sector will enjoy the facilities. This is because the provision will be limited to certain Classification of Business Fields (KLU).

Currently, the government is still reviewing the KLU that will be included in the provision of facilities. Because this is related to the amount of budget in the state budget that will be allocated to bear the Corporate Income Tax.

The government also cannot confirm when the regulation regarding this matter will be issued. However, the government ensures that this policy is issued to anticipate the impact of the increase in local tax rates. 

In particular, entertainment services, which are set at between 40%-75% in Law Number 1 Year 2022 on Financial Relations between the Central Government and Regional Governments (HKPD). (ASP)


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