On 16 August 2019, Indonesian President Joko Widodo proposed a 2,528.8 trillion rupiah ($177.56 billion) budget to parliament for 2020 and expected to set a higher target for economic growth.
Budget 2020 includes a new super deduction for investment in vocational and research and development activities, a “mini tax holiday” for companies investing under RP500bn (USD35.2m) in eligible projects, and a new investment allowance for labor-intensive industries. Budget also includes value-added tax reliefs for the importation of capital goods and transportation vehicles, including ships, aircraft, and trains. In order to encourage the development of micro, small, and medium enterprises (UMKM), the Government has reduced the final Income Tax rate for UMKM to only 0.5 percent.
