BKPM to Issue Regulation on Tax Concessions

 
Christina Desy, M. Agus Yozami
 
Aiming to increase investment into Indonesia, the government has issued a new policy on income tax concessions under Government Regulation No. 18 of 2015. Under this policy, the government will grant a 5% reduction on an investor’s income each tax each year during the first six years of investment in Indonesia.
 
To further support this policy, the Indonesian Investment Coordinating Board (BKPM) is currently preparing an implementing regulation on procedures and requirements to apply for a tax concession though the one-stop integrated service (pelayanan terpadu satu pintu – PTSP) that it operates. It is expected the regulation will be issued this week and be immediately  effective as was recently decided at a coordination meeting led by the Coordinating Minister for Economic Affairs.
 
Franky Sibarani, Head of BKPM, explained that the new system enables investors to process an application through the Central PTSP at BKPM. This is part of the government’s commitment to providing a fast, simple, transparent and integrated system for licensing and non-licensing procedures for investors.
 
Adding to Mr. Sibarani’s comments, Lestari Indah, Deputy of Investment at BKPM, said that the BKPM will decide to approve or reject an application through a trilateral meeting between Echelon-I officers from BKPM, the Ministry of Finance, and other relevant ministries related to an  investment. These meetings will also be attended by expert staff from the Director General of Tax and Ministry of Finance.
 
“The regulation also provides for a time framework to decide such applications,” said Ms. Indah.
 
Ms. Indah added that 143 business fields will be covered by the income tax concession. These business sectors include the cosmetics, pharmaceuticals, computer, and agricultural industries.
 
(hot/kc)