JAKARTA. During 2018-2022, the Indonesian government provided IDR 20 trillion worth of corporate income tax reduction facilities, including tax holiday and tax allowance. From the provision of these tax facilities, the Indonesian government managed to attract investment worth IDR 370 trillion.
Quoting Kontan.co.id, with this data the government claims that the provision of tax incentives can have a better impact in the long term.
Although there is reduced tax revenue in the short term, there will be additional tax revenue from investment activities carried out in the long term.
Read: Minister of Finance Hands Over the Tax Holiday Granting Authority to BKPM
In fact, according to the Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, the investment can generate employment so that the value of Indonesia's Gross Domestic Product (GDP) will also increase.
Previously, the provisions for granting tax holiday were regulated in the Minister of Finance Regulation (PMK) Number 130 / PMK.010 / 2020 concerning the Provision of Corporate Income Tax Reduction Facilities.
Through this regulation, the government provides an income tax reduction of up to 100% for a maximum of 20 years to companies whose business fields are included in the list of 18 designated pioneer industries.
In general, the value of incentives in the form of Indonesian tax expenditures from 2019 to 2022 continues to increase. In 2019 the value of tax expenditure was recorded at IDR 114 trillion, in 2020 IDR 134 trillion, in 2021 IDR 137 trillion, and in 2022 IDR 137 trillion. (ASP)
