Withdraw Investment, Government Make Simplicity of Tax Incentive Regulation

INDUSTRY.co.id - Jakarta, Minister of Industry (Menperin) Airlangga Hartanto said the growth of investment in Indonesia's manufacturing sector in 2016 (y-o-y) recorded the highest growth at the ASEAN level of 41.8 percent, followed by Malaysia 25.0 percent and Vietnam 3.1 percent.

In contrast, investment declines occurred in Singapore and Thailand, down 29.6 per cent and 27.5 per cent respectively.

According to Airlangga, Indonesia is still an attractive investment destination in the world. It is supported based on several research results. For example, the US News survey, Indonesia is rated as the second best investment destination in the world, beating other Southeast Asian countries such as Malaysia and Singapore.

Furthermore, the Asia Business Outlook Survey2018 report by the Economist, Indonesia is the 3rd main destination country in Asia that appeals to investors.

The same thing is also expressed in World Investment Report 2017 by UNCTAD, which put Indonesia in the 4th rank in the world related MNEs' top prospective host economies for the period 2017-2019.

The increase in Indonesia's investment attractiveness is also shown by positive opinions from international rating agencies such as S & P that upgraded Indonesia to investment grade, or other institutions (Fitch, Moody's and R & I) that changed Indonesia's outlook from stable to positive.

Minister believe, the assessment illustrates that investment activities in Indonesia is getting better and in the future will be even better.

"This makes a good momentum to show confidence to investors in the industrial sector to be more expansive," he said in Jakarta (13/3/2018).

Furthermore, in an effort to attract more investment in the industrial sector, the government is simplifying regulations on granting tax incentives.

The regulations include tax holiday facilities, tax allowance, small and medium industry taxation (IKM), and incentives for companies that have research and development (R & D) activities to engage in vocational education programs.

"So, the tax holiday regulation will be issued soon, the mechanism will be changed, while the tax allowance still requires government regulation," said Airlangga.

It is hoped that this new scheme will further simplify and accelerate industry players to get the fiscal incentive. This regulation is targeted to be completed by the end of March 2018.

Airlangga said, this policy is given to new investment and will increase state revenue.

"So, when entrepreneurs do the application, he has seen the industry into categories, both upstream and pioneer sectors, such as the development of petrochemical and steel industries, KLBI is clear," he explained.