The Indonesian Ministry of Finance (MoF) published two announcements on June 17 and 20 June 2019. The ministry is reviewing draft amendments to the Special Economic Zones (SEZ) regime and tax cuts for specific sectors.
SEZ regime:
Under this regime, the government plans a 50% tax exemption for five years, followed by a 25% tax exemption for two years for the investment cap of IDR 20 billion for proposed amendments and the introduction of income tax and VAT exemption for the purchase or lease of Property in Special Economic Zones. In addition, specific personal income tax incentives are planned.
Tax cuts for specific sectors:
The tax cuts will encourage investment in seven industrial sectors, including food and beverage, textiles, automotive, electronics and chemicals. Options for tax cuts include tax holidays, tax breaks or a tax rate reduction of up to 20%.
