JAKARTA. The government finally provided the incentive of tax holiday (tax free) to PT Indonesia Synthetic Rubber. The joint venture between PT Chandra Asri Petrochemical Tbk (TPIA) with France-based company Michelin from France is entitled to a tax holiday for seven years.

According to Harris Munandar, Head of Research and Development of Industry at Ministry of Industry, the company is entitled to a tax holiday for seven years, from the initial five-year plan, due to its large multiplier effects. "Such investment has not yet existed in Indonesia”, Harris told KONTAN on Monday (31/10).

After received the incentive, Chandra Asri determined to continue the development of the synthetic rubber factory. "It definitely helps the businesses of PT Synthetic Rubber Indonesia in the first few years when it has not made any profit," said Investor Relations of PT Chandra Asri Petrochemical Tbk Harry Tamin.

Synthetic Rubber is the last company out of the 11 companies that requested for incentive of corporate income tax exemption or tax holiday. Government only approved the requests of six companies and rejected four other proposals, while government remains undecided on PT Sateri Viscose International’s request.

According to Harris, the rayon fiber company owned by Asia Pacific Resources International Holding's Ltd has not been granted a tax holiday due to environmental issues. "There is the issue of forest fires," said Harris.

Haris stated that there are a number of requirements for a company to receive a tax holiday. First, the industry is not a pioneer industry. Second, the applicant does not meet the administration. Third, "The company has a less than IDR1 trillion of investment value, excluding working capital," said Harris.

(MUHAMMAD FARID/Kontan)

Editor: Dupla Kartini