JAKARTA. At least five foreign companies, including South Korean steel and tire producers POSCO and Hankook Tire, Kuwait Petroleum Corporation (KPC), heavy equipment manufacturer Caterpillar, and acrylic fiber producer Indorama, will receive a tax holiday facility unveiled by the government on Monday.Industry Minister M.S. Hidayat said that the investment projects that would receive the tax holiday would include a US$6 billion steel plant project owned by POSCO and an $8 billion oil refinery of Kuwait Petroleum Corporation (KPC).Construction and mining equipment producer Caterpillar and acrylic fiber Indorama, which have also planned to invest $500 million, respectively, as well as China’s Guong Feng Iron Steel and National Iranian Oil Refining & Distribution Company, were also likely to get the tax breaks, the minister said.The Finance Ministry unveiled on Monday the much-awaited new major fiscal incentives to support large capital and labor intensive industries.Finance Minister Agus Martowardojo said the incentives comprised five-to-10 year income tax breaks for five industrial sectors, including base metal, oil refining, gas organic base chemicals, renewable energy and telecommunications equipment, with an investment of at least Rp 1 trillion ($117 million).Existing investors who have operated commercially for less than one year may also ask for the tax holiday facility, Agus added.In addition to the tax holiday, the government would also soon announce more fiscal incentives in the form of a tax income reduction of 30 percent over six years, meaning 5 percent a year, for industries in certain categories.Coordinating Minister for the Economy Hatta Rajasa said that the government was still finalizing the revision of the government regulation on tax allowance which would reduce income tax by 30 percent over six years for 128 specified business sectors.The revised tax allowance regulation is pending the President’s approval, Hatta added. “We hope it can be finalized this month.”Tax allowances would be given for firms that invested a minimum of Rp 50 billion and employed 300 workers or a Rp 100 billion investment and 100 workers, and met one of 10 criteria set by the government, including operating in an isolated area, developing infrastructure projects and working with cooperatives, small and medium enterprises as partners.“The impact [of these regulations] will be huge. They can help us reach our 2011 investment target,” Investment Coordinating Board (BKPM) chairman Gita Wirjawan said.The investment board is eyeing Rp 240 trillion in investment realization this year, a 15 percent increase from the previous year, to support the government’s 6.5 percent economic growth target and create more jobs in the country, whose unemployment rate is still at 6.8 percent of the 237 million population. (Esther Samboh/The Jakarta Post)
Foreign giants to get tax break
JAKARTA. At least five foreign companies, including South Korean steel and tire producers POSCO and Hankook Tire, Kuwait Petroleum Corporation (KPC), heavy equipment manufacturer Caterpillar, and acrylic fiber producer Indorama, will receive a tax holiday facility unveiled by the government on Monday.Industry Minister M.S. Hidayat said that the investment projects that would receive the tax holiday would include a US$6 billion steel plant project owned by POSCO and an $8 billion oil refinery of Kuwait Petroleum Corporation (KPC).Construction and mining equipment producer Caterpillar and acrylic fiber Indorama, which have also planned to invest $500 million, respectively, as well as China’s Guong Feng Iron Steel and National Iranian Oil Refining & Distribution Company, were also likely to get the tax breaks, the minister said.The Finance Ministry unveiled on Monday the much-awaited new major fiscal incentives to support large capital and labor intensive industries.Finance Minister Agus Martowardojo said the incentives comprised five-to-10 year income tax breaks for five industrial sectors, including base metal, oil refining, gas organic base chemicals, renewable energy and telecommunications equipment, with an investment of at least Rp 1 trillion ($117 million).Existing investors who have operated commercially for less than one year may also ask for the tax holiday facility, Agus added.In addition to the tax holiday, the government would also soon announce more fiscal incentives in the form of a tax income reduction of 30 percent over six years, meaning 5 percent a year, for industries in certain categories.Coordinating Minister for the Economy Hatta Rajasa said that the government was still finalizing the revision of the government regulation on tax allowance which would reduce income tax by 30 percent over six years for 128 specified business sectors.The revised tax allowance regulation is pending the President’s approval, Hatta added. “We hope it can be finalized this month.”Tax allowances would be given for firms that invested a minimum of Rp 50 billion and employed 300 workers or a Rp 100 billion investment and 100 workers, and met one of 10 criteria set by the government, including operating in an isolated area, developing infrastructure projects and working with cooperatives, small and medium enterprises as partners.“The impact [of these regulations] will be huge. They can help us reach our 2011 investment target,” Investment Coordinating Board (BKPM) chairman Gita Wirjawan said.The investment board is eyeing Rp 240 trillion in investment realization this year, a 15 percent increase from the previous year, to support the government’s 6.5 percent economic growth target and create more jobs in the country, whose unemployment rate is still at 6.8 percent of the 237 million population. (Esther Samboh/The Jakarta Post)
