FY 2023 Tax Incentives: Here is the Explanation from the MoF

JAKARTA, DDTCNews – The Fiscal Policy Agency (BKF) of the Ministry of Finance states that the government remains committed to providing more directed and measured tax incentives next year.

Ad interim Head of the State Budget Policy Center of BKF Wahyu Utomo said that the granting of tax incentives could be reduced because almost all sectors have recovered from the Covid-19 pandemic. Incentives, however, will continue to be provided for certain sectors.

“Sectors that support the transformation are likely to be given incentives,” he said in the FGD on Policy Direction and Strategies for Achieving State Revenue Targets in the 2023 State Budget, quoted on Sunday (17/7/2022).

Wahyu remarked that fiscal policies in 2023 are directed at encouraging increased productivity for inclusive and sustainable economic transformation. According to him, the provision of tax incentives will also be adjusted to this prominent theme.

In the efforts to transform, the government continues to intervene in sectors with strong backward and forward linkage, including the renewable energy and electric vehicle sectors and sectors related to food and connectivity.

In principle, continued Wahyu, the government grants tax incentives as a stimulus for certain sectors to grow and have a greater impact on the economy. If that goal is achieved, the incentives may be discontinued.

“Therefore, tax incentives are targeted and temporary. They should not be given constantly. Otherwise, the economic growth will not be efficient,” he remarked.

In 2023, the government will optimise tax revenues to gradually increase the tax ratio. 2023 tax technical policies will also be formulated while maintaining the effectiveness of structural reforms, sustaining the effectiveness of fiscal reforms and fiscal consolidation.

The government is also committed to preparing targeted and measurable tax incentives to encourage the growth of certain sectors and provide ease of investment. (rig)