Indonesia offers tax incentives of up to 300 percent for semiconductor R&D

Jakarta, Indonesia — The Coordinating Ministry for Economic Affairs (Kemenko Perekonomian) said the government is granting tax incentives of up to 300 percent to bolster research and development in semiconductor technology in Indonesia. The incentives take the form of tax deductions for companies that collaborate with universities in research and development of technology, as well as strengthening talent in the semiconductor sector. ‘Tax incentives already exist relating to R&D and education, where the government can provide tax deductions to companies that work with universities. The magnitude ranges from 200 to 300 percent,’ Airlangga Hartarto said at the National Semiconductors Talent Readiness Briefing 2026 in Jakarta on Thursday. The policy aims to promote collaboration between industry and higher education institutions so that technology development aligns more closely with industry needs. In this regard, he noted the roles of the relevant ministries and universities in bridging cooperation between the business world and educational institutions so that the incentive facilities can be used optimally. ‘This is about the Directorate General of Higher Education (Ditjen Dikti) to also bridge between industry and universities, while also liaising with the Minister of Finance, because the tax deduction aspect involves a major role for the Minister of Finance,’ he said. The spokesperson for the Coordinating Ministry for Economic Affairs, Haryo Limanseto, elaborated that the incentive scheme has been in effect, but its utilisation is considered not yet optimal.