Indonesia Maintains Strict Stance on SOE Tax Incentives

Finance Minister Rejects Requests for Corporate Action Incentives

Indonesia's Finance Minister, Purbaya Yudhi Sadewa, has firmly rejected providing tax incentives for state-owned enterprises (SOEs) undertaking significant corporate actions such as mergers and restructuring. This decision comes after Danantara CEO Rosan Roeslani requested such incentives during their recent discussions.

Commercial Assessment Basis

The rationale behind this decision lies in the commercial nature of these corporate transactions. Purbaya emphasized that these actions contain significant commercial elements, stating, "There is a commercial aspect to it, so we will assess it based on commercial conditions alone." This approach suggests that the government is maintaining a cautious stance towards providing financial benefits for SOE corporate restructuring.

Implications for SOE Restructuring

This decision may have significant implications for future SOE restructuring plans and corporate actions. By not offering tax incentives, the government is pushing SOEs to evaluate these actions purely on their commercial viability. The move aligns with the government's efforts to ensure that SOEs operate on market principles while maintaining fiscal discipline.

Context and Background

The discussion between Purbaya and Danantara CEO Rosan Roeslani highlights the ongoing dialogue between the government and SOE management regarding corporate strategies. While the specific details of the proposed incentives were not disclosed, the rejection indicates the government's current fiscal priorities and its approach to SOE governance.