Indonesia Prepares New Incentive Scheme to Safeguard Investment under Global 15% Tax
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JAKARTA, Investortrust.id — The Indonesian government prepares to implement a global minimum tax of 15% in 2025, marking a pivotal shift in its fiscal incentive policy. Senior Advisor to the Minister of Finance for Tax Compliance Yon Arsal said on Tuesday, Aug 26, 2025, that this reform represents a critical step in restructuring tax incentives to sustain investment and consumer purchasing power.
The new framework follows Minister of Finance Regulation (PMK) No. 136/2024 on the Imposition of Global Minimum Tax under International Agreements, effective for the 2025 tax year. The regulation requires multinational companies with consolidated global revenue of at least 750 million euros to pay a minimum tax rate of 15%.
The global minimum tax stems from the second pillar of the G20 and Organisation for Economic Co-operation and Development (OECD) framework, endorsed by more than 140 countries to curb cross-border tax avoidance practices. Indonesia joins over 50 countries that have confirmed their commitment to adopting the policy.
Yon explained that existing fiscal tools such as tax holidays, which exempt companies from paying taxes temporarily, and tax allowances, which grant deductions under certain conditions, will lose effectiveness in the new regime. “Even if we set the tax rate at 0%, the parent country will still impose the minimum tax,” he said during an online discussion hosted by the Indonesian Economics Scholars Association (Ikatan Sarjana Ekonomi Indonesia/ISEI) Jakarta.
The government has engaged ministries, industry associations, and business players in designing a replacement scheme. Yon stressed that the upcoming incentives must be more targeted, designed to maintain Indonesia’s competitiveness as an investment destination while also protecting domestic demand.
“We are currently discussing the most appropriate incentive scheme to be provided,” Yon said.
Officials acknowledged that multinational corporations may adjust their expansion strategies in response to the global minimum tax. To mitigate risks, the government expects its new incentive mechanism to preserve foreign direct investment (FDI) inflows and sustain their contribution to national economic growth.
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