APSN Banner

Indonesia to offer tax incentives for industries

Source
Reuters - November 26, 2008

Jakarta – Indonesia plans to offer tax incentives in 2009 to help labour-intensive industries as it seeks to boost Southeast Asia's biggest economy amid slowing global demand, a government official said.

Indonesia forecasts economic growth to ease to between 4.5 and 5.0 percent in 2009 from an estimated 6.2 percent this year amid slowing demand for its key commodities such as palm oil and cocoa and expects to rely more on its domestic market of around 226 million people to boost growth.

Industries which may be eligible for tax incentives include food and beverages, electronics, automotives, heavy equipment and small-size geothermal power generators, said Eddy Putra Irawady, the deputy to the chief economics minister.

Government officials declined to elaborate, saying details of the incentives were still being discussed. The incentives will come on top of lower tax rates effective next year.

Under the new tax law approved in the middle of this year, corporate income tax will be cut to 28 percent in 2009 and 25 percent in 2010, from 30 percent currently. "Industries need the government's help," Planning Minister Paskah Suzetta told reporters.

The world's fourth-most populous country has a jobless rate of 8.46 percent of a total labour force of more than 100 million as of February 2008, one of the highest in Asia.

Country