Indonesia to Extend Tax Holiday Incentive Until 2026

New Ministerial Regulation Being Prepared

The Indonesian Ministry of Finance has announced its decision to extend the tax holiday incentive program until 2026. According to Febrio Kacaribu, Director General of Economic and Fiscal Strategy at the Ministry of Finance, a new Ministerial Regulation (PMK) is being drafted to facilitate this extension ¹

Background and Rationale

The current Ministerial Regulation No. 69/2024 governing the tax holiday incentive is set to expire in December 2025. To continue attracting investments and supporting economic growth, the government has decided to extend this incentive. The new PMK will replace the existing regulation and provide a legal basis for the tax holiday extension through 2026.

Implications for Investors and Economic Growth

This extension is expected to maintain Indonesia's competitiveness in attracting both domestic and foreign investments. By providing a longer-term tax incentive, the government aims to encourage significant investments in strategic sectors, thereby supporting overall economic development.

Preparation of New Regulation

The Ministry is currently working on the new PMK, which will outline the specific terms and conditions of the tax holiday extension. This includes potential adjustments to eligibility criteria, the duration of the tax holiday, and any other relevant provisions to align with current economic policies and investment priorities.