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Indonesia Announces Plans For Tax Relief

Friday, July 5, 2019

The Indonesian Government has announced that it will target tax relief at seven more industries, building on targeted tax relief for 17 so-called pioneer industries announced last year.

The designated industries, which the Government has yet to fully list, would benefit from a 20 percent effective corporate income tax rate, the Minister of Finance has suggested. He said the Government will look to ensure tax relief for the food and drinks, textile, automotive, electronics, and chemicals industries.

He also said that the Government will soon release modernized regulations on the 200 percent super deduction for electric vehicles, that foreign aircraft leases would be exempt from VAT, and the tax rate on income from bonds used to finance infrastructure projects will be lowered from 15 percent to 5 percent.

Finally, he said the VAT exemption threshold for the waiver of VAT on modest houses, and the luxury tax, will be raised, to be set depending on the location of the property.