TEMPO Interactive, Jakarta: Entrepreneurs are pushing the government to realize its promise to provide tax holidays.
“During this uncertain situation, we’re asking the government not just to talk about giving tax holidays. Take a concrete measure and complete the Tax Bill,” Sofjan Wanandi, General Chairman of Indonesian Businesspeople Association, told Tempo, yesterday (11/12).
Previously, the government was considering tax holidays in the form of tax cuts, subsidies or pricing policies for attracting investment.
One of the sectors that will probably be provided incentives is the bio-fuel industry as it is included as part of the national scale energy policy framework (Koran Tempo, December 11).
According to Sofjan, the entrepreneurs’ demand for tax exemptions is already too late.
The reason is that several multinational companies have already planned to relocate their factories abroad as they do not receive support from the government.
This is despite, he said, the fact that the industries are pioneer ones.
“We have been asking for incentives for a long time, but nothing has been done. The Investment Decree should have already been issued, but the government reasoned that it must await the tax provisions first,” said Sofjan.
He said that it was better that the tax holidays be addressed only to capital-intensive industries that really need them, such as agriculture and bio-fuel.
“Incentives must be given to industries that are pioneers from the aspects of technology, opening up markets and creating a lot of job opportunities. Not for the mining industry, for example,” said Sofjan.
Derom Bangun, General Chairman of the Indonesian Palm Oil Producers Association, said he was of the opinion that all that had to be said about tax holidays had been said almost 10 years ago.
“Despite it being too late, it is a good sign that the government is serious about supporting investment development,” he said.
The tax holidays are aimed at Indonesia not losing out to other countries in terms of incentives.
Derom said he agreed if bio-fuels were indicated as an industry to receive incentives.
“Because this industry is a pioneer which has high risks and uncertain market,” he said.
Derom went on to say that it made sense for Indonesia’s palm oil industry to receive incentives as it is the largest in the world.