Indonesia Introduces 200% Tax Incentive for New Capital Infrastructure Projects

Super Tax Deduction Policy to Boost Private Investment

The Indonesian government, through the Nusantara Capital Authority (OIKN), is offering a significant 200% super tax deduction for companies that invest in or contribute to public and social facilities in the new capital city, Nusantara. This fiscal incentive, formalized through Finance Minister Regulation No. 28/2024, is designed to accelerate the development of the new capital by encouraging private sector participation.

Key Features of the Tax Incentive

1. 200% Super Tax Deduction: Companies can reduce their taxable income by up to 200% of their contributions to public facilities
2. Eligible Contributions: Includes construction of public facilities such as bus stops, green spaces, and tourist attractions
3. Branding Opportunities: Companies can brand the facilities they fund without additional cost
4. Application Process: Requests for the tax incentive will be processed through the Online Single Submission (OSS) system as per Article 114 of the Finance Minister Regulation

Government Perspective on the Incentive

Insyafiah, Director of Funding at OIKN, explained that the super tax deduction is a direct fiscal benefit for companies investing in Nusantara. She highlighted that this scheme not only reduces corporate tax burdens but also enhances the post-tax income of contributing companies. The initiative is expected to create a positive economic ripple effect and improve the quality of life in the new capital.

Dwi Setyobudi from the Ministry of Finance emphasized that this incentive is designed to stimulate investment growth, expand business sectors, and create a more conducive business environment for investors in Indonesia. The government anticipates that this policy will attract significant private investment into Nusantara's infrastructure development.

Impact on Businesses and Community

The tax incentive offers dual benefits to companies: significant tax savings and enhanced brand visibility through the naming rights of public facilities. This creates a win-win situation where companies can demonstrate their social responsibility while improving their financial bottom line. The constructed public facilities will also contribute to improving the quality of life for future residents of Nusantara.