TEMPO.CO, Jakarta- The Industry Ministry has proposed to provide seven companies in Indonesia with tax incentives in a bid to improve the investment climate.
“We have proposed a tax holiday of Rp 67.5 trillion (US$5 billion) for seven companies to the Finance Ministry,” Industry Minister Saleh Husin said in a press release on Friday, August 14.
According to Saleh, the tax holiday will have a significant impact on investment, job creation, equitable industry outside Java and regional revenue.
The seven companies to be provided with the tax holiday are PT Indorama Polychem Indonesia, Ogan Komering Ilir Pulp & Paper Mills, Caterpillar Indonesia Batam, Feni Faltim, Well Harvest Winning Alumina Refinery, Synthetic Rubber Indonesia, and Sulawesi Mining Investment.
Earlier in a plenary session with the People’s Consultative Assembly, President Joko Widodo pitched fiscal incentives for strategic economy activities to improve the country’s investment and business climate.
Saleh said that the tax holiday plan had been approved following the issuance of Finance Minister’s decision on the tax holiday for PT Unilever Oleochemical Indonesia, Petrokimia Butadine Indonesia and Energy Sejahtera Mas.
In addition to fiscal incentives, Saleh added, the main problem hampering the realization of investments was lack of infrastructures, including electricity and uncompetitive gas price.
“The availability of infrastructures and energy is one of the prerequisites to boost the development and competitiveness,” Saleh said.