Indonesia is introducing a novel tax program to lure foreign and private investors, which is the up to 300% super deductible tax. This will be the luxury for investors who help fund vocational programs in the country.
The Minister of Research and Technology Bambang Brodjonegoro believed that, once the tax discounts will be in effect, there will be bigger investment supports from private sectors, either local or foreign investors.
Regarding the plan, the Minister of Industry Agus Gumiwang Kartasasmita had traveled to neighboring countries to gather opinions. Accordingly, results showed that many foreign companies were hyped for the program.
“I have visited various countries and met many industry leaders in person. The responses were positive,” he told reporters.
He further explained that, among them, automobile and nickel industries were the ones who put more interests. Additionally, some of them already planned to relocate their business or open branches in Indonesia.
“We anticipate some good news soon,” he added.
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Super Deductible Tax Brings More Opportunities to Indonesia
Besides the promising boosts in various industrial sectors, Indonesia is also expecting other outcomes from the super deductible tax. Reportedly, government believed that research will gain benefits from it.
The Ministry of Research and Technology has a robust faith in the prospective benefits to the country’s research. The institution openly welcomes to the participation of private sectors to take part in research and innovation.
“Everyone has been working really hard for this, now we just need to wait for the Finance Ministry to set up the regulations. If this worked, then (more) investors came to Indonesia, the private industries would most likely participate in research and development,” said the minister.
For the time being, the ministry cannot rely on government’s 0.3% GDP fund for research alone. Most of the time, private research institutions and universities do the job.
Moreover, the ministry hopes that this will raise the country’s research index globally. Accordingly, Indonesia currently ranked 85 out of 129 countries in global innovation index, scoring 29.72 out of 100.
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