JAKARTA -(Dow Jones)- Indonesia introduced tax incentives to attract investment in renewable energy as the former member of the Organization of Petroleum Exporting Countries seeks to reduce reliance on fossil fuels, the Finance Ministry said Friday.
Finance Minister Sri Mulyani signed a decree late last month that reduces the base used to calculate income tax by 5% of total investment for six years, effective Jan. 29, the ministry said in a press release.
The government will also allow faster asset amortization and impose a lower tax rate on dividend payments for non-resident investors.
Jakarta will also compensate losses incurred by investors for a period of between five and 10 years, the ministry said, without elaborating.
"Strategic" equipment and machinery needed for renewable energy projects will also be exempted from value-added tax and import tariffs, it added.