Indonesia’s new tax incentives for investments alone won’t help halal industry, say experts
JAKARTA – Indonesia's government on December 13 issued regulation No. 78/2019 that offers tax incentives for businesses and their extension to 183 sectors from 145 sectors.
Sectors directly relevant for Islamic economy stakeholders include beef cattle breeding, dairy farming, baby food, textiles, cosmetics, pharmaceuticals, traditional medicines, and hotels. A lot more sectors are those that feed into others, including agriculture, commodities, food processing and ingredients.
The incentives, all subject to specific criteria and conditions, include a reduction in net income, by 30% over six years, of total investment value for fixed assets, income tax on dividends paid to foreigners set at 10% or a lower rate according to applicable double tax avoidance agreements, and compensation for loss of earnings for eligible businesses for five to ten years. The new rules amend government regulations No. 9/2016 and No. 18/2015.
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