Friday, 8 January 2016

RELAXING OF THE RULES ON TAX HOLIDAY



Through the Minister of Finance Regulation No. 159/PMK.010/2015, Finance Minister Bambang Brodjonegoro issued a new policy, which essentially makes the Tax Holiday rules better, and the process of obtaining such facility become more simplified. In a news conference with the Minister of Industry and Deputy of Investment Coordinating Board (PKPM), in Jakarta, on Thursday (August 27), Bambang stated that the difference of the facilities in regulation,  in addition to aiming to facilitate its implementation, is also aimed at encouraging the industry to be more oriented to the downstream sector.
           
“The difference with the previous regulation, i.e. Minister of Finance Regulation No. 130/PMK.011/2011 is that in the previous regulation, tax holiday request was filed to the Ministry of Industry or BKPM, now it is filed through the OSS (One stop Service) that has been established in BKPM since last year, he said. In addition, the new regulations of the Minister of Finance also give certainty to companies that requested the facility. After a certain period, these companies can know whether their tax holiday request is accepted or projected.
           
Why? Because after the issuance of the this regulation, the determining of tax holiday facility no longer has to wait for the issuance of presidential regulation, but directly from One Stop Service (PTSP) at BKPM submitted to the Verification Committee. From there, they immediately submit recommendation to the Finance Minister. If The Minister of Finance is certain that the company meets the requirements, and worth of such facility, The Minister of finance will immediately grant the tax holiday facility.

Similarly, the requirements to obtain tax holiday will not be much difference from the previous regulation contained in Minster of Finance Regulation No. 130/2011 the criteria of the company that will receive the facility is that the company must be a pioneer company and classified as a tax-obedient company. Recipients of tax holiday are companies whose investment is at least IDR 1 trillion. The Government also imposes certain rules that apply relaxation in the form of a minimum investment of IDR 500 billion provision to certain industries, Bambang added.

Through tax holiday facility, the Government provides convenience in the form reduction of income tax (corporate income tax) payable between 5 to 15 years. The amount of the reduction is from 10 percent to 100 percent. “If means that we did not exempt all tax payments of the company concerned, but only reduces the corporate income tax payable”, he said.

Four Companies Acquiring Tax holiday

In the some occasion, Minister of Industry Saleh Husin stated that there are four companies that received tax holiday facility First, PT Ogan Ogan llir (OKI) Pulp and Paper Mills; second, PT Unilever Oleochemical Indonesia; third, PT Petrokimia Butadine Indonesia; and fourth, PT Energi Sejahtera Mas. Previously, the Ministry of Industry has proposed 11 companies to obtain tax holiday. However, this time the Government has just approved the grant of tax holiday to four companies. In addition, there are two companies that are still being discussed and are waiting for the issuance of Minister of Finance Regulation.

“PT Indorama Polychem Indonesia, PT Caterpillar Indonesia Batam, PT Feni Halim, PT Well Harvest Winning Alumina Refinery, and PR synthetic Rubber Indonesia are in the process by the verification team. As for Companies that submitted tax holiday proposals and the proposals have not been processed, there are two companies, namely PT Sulawesi Mining Investment and PT Sateri Viscose International”, he said.

Tax Holiday policy was launched as a strategy to attract long-term investment funds, especially for pioneer industries. This step is in line with improvement of business and investment climate in the country. Therefore, his party is optimistic that the policy will accelerate the growth of the pioneer industries which will encourage further development of the industrial sector. “In the context of tax holiday, a pioneer industry is an industry that has a strategic value for the national economy and provides value added and high externality”, he added.

In addition, the definition of “pioneer industry” is an industry that introduces new technologies, and has extensive connections. There are five pioneer industries, i.e. base metals, petroleum refining and/or basic organic chemicals derived from petroleum and natural gas, machinery, industry in the field of renewable resources, and communications equipment industry. The Government also stipules nine pioneer industry business sectors, namely 1) upstream metal sectors, 2) petroleum refining, 3) basic organic chemicals derived from petroleum and natural gas, and 4) machinery industry that produces industrial machineries.

The fifth business sector is processing industry based on agriculture, forestry, and fisheries, 6) telecommunications, information and communications, 7) marine transportation industry, 8) processing industry which is a major industry in the Special Economic Zones, 9) economic infrastructure in addition to the one using Government – Enterprise cooperation scheme (KPBU). (E)

Business New - September 2, 2015

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