Finance Ministry Clarifies 50-Year Tax Holiday Plan for Indonesia's International Financial Centre
The Ministry of Finance has finally spoken out regarding the plan to provide a 0% tax incentive for up to 50 years at the Indonesian International Financial Centre (PFII). The government has stressed that the facility will not apply to all business actors operating in the area.
Director General of Financial Sector Stability and Development at the Ministry of Finance, Herman Saheruddin, said the incentive scheme at PFII will vary depending on the type of tax and the characteristics of the business activity. According to Herman, provisions regarding these various incentives will be regulated in the PFII Law, which is scheduled to be passed in a plenary session of the Indonesian House of Representatives (DPR RI) on Tuesday (21/7/2026).
“The 0% tax incentive will differ; there is income tax, VAT, and luxury goods sales tax. Then there are also import duties, all different. But do not misunderstand, for example, 0% income tax does not mean not paying tax at all, because it will be subject to the global minimum tax,” Herman said when met by reporters at the DPR RI Building on Monday (20/7/2026).
He explained that the incentive concept offered by PFII is basically in line with various international financial centres that have developed earlier. However, the government ensures that PFII will have its own characteristics and attractiveness compared to financial centres in other countries. “So, it is similar to other financial centres; you can see the details in the law later,” Herman continued.
Herman stressed that not all companies are automatically entitled to obtain these tax facilities. Companies wishing to get incentives must meet certain criteria and bring investment to PFII. “Companies will certainly want to follow certain criteria; the important thing is that they must bring their investment to PFII. But, more details will be regulated in a Government Regulation,” Herman explained.
Furthermore, he emphasised that the incentive scheme at PFII is different from the facilities provided so far in Special Economic Zones. According to him, the main purpose of establishing PFII is to expand national economic financing sources through the inflow of global funds and investment.
Meanwhile, Director General of Taxes at the Ministry of Finance, Bimo Wijayanto, also confirmed that the 0% tax incentive will not be given evenly to all parties operating in PFII. According to Bimo, several categories of business actors and experts will be regulated specifically through a Minister of Finance Regulation to be issued by the government.
Previously, the Chair of Commission XI of the DPR RI, Mukhamad Misbakhun, revealed that PFII would offer a 0% tax incentive for a period of up to 50 years. In fact, in his view, the facility should ideally be attached for as long as PFII exists. PFII itself is designed to become Indonesia’s new international financial centre, expected to attract global capital flows, deepen domestic financial markets, and strengthen Indonesia’s position in regional financial centre competition.