Smart Tax Incentives for Indonesia’s New Capital

Indonesia’s new capital, Ibu Kota Nusantara (IKN), is envisioned as a green, smart and inclusive metropolis. To lure investors, the government has introduced a suite of tax incentives, while also preparing for the implementation of Finance Ministry Regulation 136/2024 that imposes a 15% global minimum tax on multinational companies.

The IKN development budget through 2028 is projected at Rp48.8 trillion, and the incentive package includes up to a 30‑year tax holiday for projects investing at least Rp10 billion, a 0% final income tax for micro‑small‑medium enterprises, and super‑deductions of up to 250‑350% for vocational, R&D and charitable activities. While these measures aim to broaden the tax base, officials warn they could trigger tax avoidance and clash with the global minimum tax commitment.

Experts call for ‘smart tax incentives’ that are measurable, simple and transparent, clustered by green and digital sectors, and limited to a single‑tax‑incentive per investor. Strengthened monitoring, a transparent platform, and coordination among the IKN Authority, the tax office and relevant ministries are essential to prevent abuse. Read the full source at news.ddtc.co.id (https://news.ddtc.co.id/komunitas/lomba/1814626/meramu-smart-tax-incentives-di-ibu-kota-nusantara).