OECD Pillar Two Threatens Indonesian Tax Incentives for Investors

The Indonesian government may not fulfill promises to grant several tax incentives for investors after all following the implementation of Pillar Two of the Global Anti-Base Erosion agreed upon by the Organization for Economic Co-operation and Development (OECD) member countries.

Center for Indonesia Taxation Analysis (CITA) analyst Fajry Akbar said the global consensus would affect tax incentives such as tax holidays.

According to Fajry, multinational companies will start recalculating their investment plans if the government adopts the Pillar Two scheme. "What is the return on investment after this global consensus takes effect?" he asked on Sunday.

He considered that the tax holiday provision would make the government lose potential revenue from companies. Conversely, the facility will provide additional revenue for the multinational company's representatives in the country.