A Myriad of Tax Incentives to Attract Renewable Energy Investments

Summary

The government will provide fiscal incentives to attract investment in renewable energy-based power plants, including tax allowances, tax holidays, and exemption from import duties. Director of Manufacturing Industry Planning at the Investment Ministry, Alma Karma, said this incentive is a red carpet for domestic and foreign investors through the Online Single Submission System (OSS).

"(Incentives) includes corporate income tax of 22 percent for the 2020-2021 tax year and 20 percent of corporate income tax for the 2022 tax year and beyond," Alma said during the Indo EBTKE Conex 2021 webinar on Wednesday.

Then, investors can get a reduction in net income tax for six years for 30 percent or 5 percent per year and the exemption from import duties for raw materials for two years if using at least 30 percent locally made machines and equipment. In addition, investors will get a tax holiday for 5-20 years with a minimum investment of Rp 500 billion. The maximum income tax reduction is 100 percent. The mini tax holiday is valid for five years with an investment of Rp 100-Rp 500 billion.

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