- The Ministry of Finance is reviewing the tax holiday scheme to implement a Global Minimum Tax (GMT) of 15% by 2025. The Chief of the Ministry of Finance's Fiscal Policy Agency (Badan Kebijakan Fiskal - BKF), Febrio Kacaribu, stated that the 15% GMT is part of the agreement under Pillar 2 of the Global Anti-Base Erosion (GLoBE) initiative, which aims to reduce the practice of companies shifting profits to low-tax countries.
- Kacaribu further explained that the government provides a 7% income tax exemption for companies, reducing the corporate income tax rate from 22% to 15% under the GMT framework. He acknowledged that this policy may reduce business interest in investing in Indonesia. However, the GMT ensures that income not taxed in Indonesia will not be subject to a "top-up" tax by the company's country of origin, thereby preserving Indonesia's right to tax.
- Kacaribu also noted that a 0% tax rate would benefit the investment's country of origin by 15%. He emphasized that the Ministry of Finance and the Ministry of Investment/BKPM are currently discussing alternative incentives, such as physical incentives, to compensate for the 15% tax obligation. These incentives could take the form of a 7% tax holiday instead of a 0% tax holiday..
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