Fahmi Proposes Tax Holiday
Tuesday, 04 July, 2006 | 12:45 WIB

Tempo Interactive, Jakarta: Industry Minister Fahmi Idris believes tax holiday incentives (tax exemptions within a certain period) are necessary to be included in the Investment Bill. “The incentives will make Indonesia more competitive compared to other countries, and investors more interested to invest here,” he said during a working meeting with the House of Representatives (DPR) Commission for Trade in Jakarta, yesterday (3/7).

According to him, Indonesia must compete with other countries for investments by offering more attractive incentives. He cited neighboring countries that are Indonesia’s rivals—Malaysia, Thailand and Vietnam—which have offered tax holiday incentives. Malaysia offers a tax holiday for five to ten years, Thailand three to eight years, and Vietnam two to four years.

Tax exemptions are also effective in those countries. Malaysia cuts 70 percent of its taxes for five years. Vietnam cuts the tax by 10 to 20 percent and China by 33 percent. Duty exemptions of capital goods and base commodities are also effective in Malaysia, Thailand, Vietnam and China.

Fahmi said it is necessary to state the deadline of license processing in the Investment Bill draft. “For example, the administration process is 30 days minimum,” he said.

RR Ariyani
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