Wed, 08 Sep 2010
From: The Jakarta Globe
By Dion Bisara
Jakarta. The government plans to expand a tax incentives program for foreign investors to include additional downstream and “pioneering” sectors, as well as offer sweeteners for companies that invest more than $1 billion and create a certain number of jobs, the country’s investment chief said late on Monday.

Gita Wirjawan, head of the Investment Coordinating Board (BKPM), said the revisions would begin as soon as the end of this month, but “would take quite a long time.” He described “pioneering” industries as sectors that did not yet exist in Indonesia.

The current regulation already provides tax breaks to oil refineries, steel makers and producers of geothermal energy, among others.

It allows for companies to deduct 30 percent of their initial investment from their taxable income over six years, with a maximum of 5 percent a year. It also allows for faster amortization and depreciation of assets, reducing the amount of taxable income.

Gita said tire manufacturing would be included in the revisions, which would benefit Seoul-based Hankook Tire. Last month, he said Hankook had committed $1.2 billion for a manufacturing plant in Indonesia.

“The tire industry was not included in the [existing] regulation, while we have this tire company wanting to enter Indonesia,” Gita said on Tuesday.

In addition, the government is also preparing a regulation that would grant incentives for companies that invest more than $1 billion - or “slightly less if the investment is in eastern Indonesia” - and create a labor force of at least 3,000 people, Gita said.

Finance Minister Agus Martowardojo said on Monday that the government was working to make room in the state budget to accommodate the incentives.

However, Deputy Finance Minister Anny Rahmawati said every Rp 1 trillion ($111 million) in tax breaks to corporations required the government to find an additional Rp 200 billion for education.

“By law, 20 percent of the state budget has to go for education. In case of tax incentives it looks like the government gets additional income, but actually the government does not,” she said.

The state is seeking billions of dollars in foreign investment to help it achieve the president’s target of 7.7 percent GDP growth by 2014.

Purbaya Yudhi Sadewa, an economist at the Danareksa Research Institute, welcomed the tax-incentive plan. “As long as they give incentives for downstream industries, which create more value for us, the incentives would do great,” he said.

“The incentives should encourage new industries such as high-tech,” he added.

“The incentives for new industries would not burden state budget. But incentives such as tax allowance for existing industries would, so the government should select the industries that have large multiplier effects.”



News Search/Filter
Transaction Rates
23 Jun 18
Buy
Sell
AED1
3,824.31
3,824.31
AFN1
196.35
196.35
ALL1
129.23
129.23
AMD1
29.14
29.14
ANG1
7,740.29
7,740.29
AOA1
57.11
57.11
ARS1
520.33
520.33
AUD1
10,454.06
10,454.06
AWG1
7,852.06
7,852.06
AZN1
8,251.03
8,251.03
BAM1
8,363.06
8,363.06
BBD1
7,023.69
7,023.69
BDT1
166.26
166.26
BGN1
8,373.47
8,373.47
BHD1
37,055.64
37,055.64
BIF1
7.86
7.86
BMD1
14,047.38
14,047.38
BND1
9,298.32
9,298.32
BOB1
2,033.15
2,033.15
BRL1
3,710.25
3,710.25
BSD1
14,047.38
14,047.38
BTC1
86,145,614
86,145,614
BTN1
207.23
207.23
BWP1
1,361.29
1,361.29
BYN1
7,044.75
7,044.75
BZD1
6,989.60
6,989.60
CAD1
10,580.49
10,580.49
CDF1
8.69
8.69
CHF1
14,212.32
14,212.32
CLF1
603,669.49
603,669.49
CLP1
22.00
22.00
CNH1
2,158.09
2,158.09
CNY1
2,159.40
2,159.40
COP1
4.81
4.81
CRC1
24.77
24.77
CUC1
14,047.38
14,047.38
CUP1
550.87
550.87
CVE1
147.61
147.61
CZK1
635.21
635.21
DJF1
78.89
78.89
DKK1
2,197.09
2,197.09
DOP1
284.01
284.01
DZD1
119.75
119.75
EGP1
786.94
786.94
ERN1
929.75
929.75
ETB1
509.14
509.14
EUR1
16,388.38
16,388.38
FJD1
6,692.42
6,692.42
FKP1
18,632.71
18,632.71
GBP1
18,632.71
18,632.71
GEL1
5,719.98
5,719.98
GGP1
18,632.71
18,632.71
GHS1
2,970.60
2,970.60
GIP1
18,632.71
18,632.71
GMD1
297.14
297.14
GNF1
1.55
1.55
GTQ1
1,874.45
1,874.45
GYD1
67.17
67.17
HKD1
1,789.96
1,789.96
HNL1
587.15
587.15
HRK1
2,219.07
2,219.07
HTG1
211.00
211.00
HUF1
50.43
50.43
IDR1
1.00
1.00
ILS1
3,895.92
3,895.92
IMP1
18,632.71
18,632.71
INR1
206.99
206.99
IQD1
11.81
11.81
IRR1
0.33
0.33
ISK1
129.61
129.61
JEP1
18,632.71
18,632.71
JMD1
107.01
107.01
JOD1
19,776.53
19,776.53
JPY1
127.74
127.74
KES1
139.19
139.19
KGS1
205.80
205.80
KHR1
3.45
3.45
KMF1
33.26
33.26
KPW1
15.60
15.60
KRW1
12.63
12.63
KWD1
46,431.20
46,431.20
KYD1
16,857.64
16,857.64
KZT1
41.31
41.31
LAK1
1.66
1.66
LBP1
9.29
9.29
LKR1
88.35
88.35
LRD1
95.60
95.60
LSL1
1,044.80
1,044.80
LYD1
10,367.07
10,367.07
MAD1
1,477.11
1,477.11
MDL1
827.66
827.66
MGA1
4.22
4.22
MKD1
265.57
265.57
MMK1
10.12
10.12
MNT1
5.76
5.76
MOP1
1,738.48
1,738.48
MRO1
39.45
39.45
MRU1
392.93
392.93
MUR1
402.47
402.47
MVR1
912.16
912.16
MWK1
18.60
18.60
MXN1
702.15
702.15
MYR1
3,510.08
3,510.08
MZN1
235.69
235.69
NAD1
1,045.58
1,045.58
NGN1
39.02
39.02
NIO1
442.99
442.99
NOK1
1,735.48
1,735.48
NPR1
129.55
129.55
NZD1
9,702.57
9,702.57
OMR1
36,484.26
36,484.26
PAB1
14,047.38
14,047.38
PEN1
4,298.46
4,298.46
PGK1
4,284.70
4,284.70
PHP1
264.02
264.02
PKR1
115.52
115.52
PLN1
3,788.72
3,788.72
PYG1
2.46
2.46
QAR1
3,858.00
3,858.00
RON1
3,513.87
3,513.87
RSD1
138.67
138.67
RUB1
223.06
223.06
RWF1
16.32
16.32
SAR1
3,745.82
3,745.82
SBD1
1,774.99
1,774.99
SCR1
1,037.38
1,037.38
SDG1
779.97
779.97
SEK1
1,586.46
1,586.46
SGD1
10,341.88
10,341.88
SHP1
18,632.71
18,632.71
SLL1
2.22
2.22
SOS1
24.17
24.17
SRD1
1,881.01
1,881.01
SSP1
107.83
107.83
STD1
0.66
0.66
STN1
664.49
664.49
SVC1
1,605.51
1,605.51
SYP1
27.27
27.27
SZL1
1,044.80
1,044.80
THB1
426.93
426.93
TJS1
1,542.66
1,542.66
TMT1
4,013.55
4,013.55
TND1
5,410.33
5,410.33
TOP1
6,124.24
6,124.24
TRY1
3,003.52
3,003.52
TTD1
2,084.44
2,084.44
TWD1
463.41
463.41
TZS1
6.17
6.17
UAH1
535.49
535.49
UGX1
3.63
3.63
USD1
14,047.38
14,047.38
UYU1
443.36
443.36
UZS1
1.78
1.78
VEF1
0.17
0.17
VND1
0.61
0.61
VUV1
129.28
129.28
WST1
5,440.99
5,440.99
XAF1
24.98
24.98
XAG1
231,119.56
231,119.56
XAU1
17,832,066.98
17,832,066.98
XCD1
5,197.82
5,197.82
XDR1
19,827.69
19,827.69
XOF1
24.98
24.98
XPD1
13,481,179.54
13,481,179.54
XPF1
137.33
137.33
XPT1
12,333,414.48
12,333,414.48
YER1
56.12
56.12
ZAR1
1,045.74
1,045.74
ZMW1
1,394.42
1,394.42
ZWL1
43.57
43.57
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services