Indonesia: Updates to COVID-19 tax incentives
Indonesia’s Minister of Finance has issued regulation number 110/PMK, which provides additional tax incentives in response to the coronavirus pandemic. The most important changes include:
- Tax reduction increase to 50 percent (from 30 percent) on monthly income tax installments for taxpayers who work in certain industries. For taxpayers that have submitted notifications to use this incentive prior to 14 August 2020, the 50 percent reduction is applicable from the July 2020 fiscal period. Otherwise, the new rate is applicable through December 2020.
- Introduction of a new incentive that provides for Article 4(2) final income tax on certain construction activities to be borne by the government. Taxpayers eligible for this incentive are those who have been instructed by a relevant government institution to carry out a specific labor-intensive program considered vital for the agricultural sector.