Speaking at the BNI Investor Daily Summit 2023 in Senayan, Jakarta, on Wednesday (25/10/23,) Indonesia’s Investment Minister, Bahlil Lahadalia confirmed that the government will keep granting tax holidays to attract foreign investors so long as the global minimum tax or GMT policy is not yet rendered, according to reporting from Tempo.
The minister said that the global minimum tax rules serve as a “play thing” for developed countries. This is because it is a strategy to attract investors to developed countries. So, the implementation is not “apple to apple” between developed and developing countries. “How will we compete [if it is implemented]?” Bahlil asked rhetorically.
He had previously requested that the global minimum tax rule of 15-percent be reviewed because if it is implemented too early, it will disrupt the downstream program promoted by the government, say Tempo, adding that the global minimum tax policy would also force developing countries to send raw materials to developed countries. That’s why he accused the rule of being a trick played by developed countries.
Meanwhile, Finance Minister Sri Mulyani said many countries were preparing to implement the global minimum tax agreement. However, Indonesia still applies fiscal incentives to boost investment competitiveness.
“This will be one of the global focuses, which is now gradually implementing global tax rules to reduce various tax holidays in order to prevent the race to the bottom,” Sri said in a joint meeting with the House of Representatives (DPR) Commission IX as quoted from Antara News.