Thu, 16 Nov 2006
From: Tempo Interactive
By Wednesday, 15 November, 2006 | 14:55 WIB
TEMPO Interactive, Jakarta: The government has decided to give tax incentives to 15 business sectors by the beginning of next year.

The tax relief can be realized because the government has finished revisions of the Governmental Regulation Number 148/2000 concerning Facilities of Income Tax for Capital Investment of Certain Business Sectors and/or Certain Regions.

“There will be 15 business sectors that will get incentives with some regions especially off-Java regions,” said Finance Minister Sri Mulyani Indrawati.

Capital investment in certain sectors at certain regions will gain relief of income tax facility: among others, 30 percent of net income of the amount of capital investment.

Those 15 business sectors are also allowed to accelerate assets shrinkage and amortization and to get longer loss compensation that of under 10 years.

Income tax assessment on paid dividends to foreign tax subject is relatively low as well: 10 percent.

In fact, the tariff may be lower in accordance with the approval of valid double tax avoidance.

Muhammad Lutfi, Head of the Coordinating Capital Investment Board (BKPM), added that the governmental regulations revisions were handed over to the State Secretary's office yesterday (11/14) to be legalized by the President.

“We hope that by 1 January 2007, it will have been approved,” he said.

However, according to Lutfi, the government has not yet definitively determined regions that will receive the tax incentives.

“We are still discussing the regions in order to clarify to tax offices so that they can handle them easily,” he said.

Agus Supriyanto



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