Indonesia outlines four core principles for revamping tax incentive policy

During the International Tax Conference 2026, Yon Arsal, a special staffer for taxation at Indonesia's Finance Ministry, outlined four pillars to improve the country's tax incentive system. The first pillar calls for consistency with global tax rules, especially the 15% Global Minimum Tax, recommending cash grants and tax credits over conventional holidays. The second pillar focuses on matching incentives to evolving business structures, urging a shift toward digital, electronics and renewable energy sectors as neighboring nations have done.

The third pillar stresses that incentives must be timely, well-targeted and time-bound, referencing the National Economic Recovery (PEN) program that aided MSMEs during the COVID-19 crisis. The final pillar emphasizes ongoing evaluation, clear deadlines, and proper targeting of all tax benefits. Arsal argued that these steps are essential for keeping Indonesia's fiscal policy competitive and responsive to future economic changes.