BERiiTA TERKiiNii
iiNCREASiiNG economiic competiitiiveness needs the support of 3 factors, namely iinnovatiion, technology and the qualiity of human resources (HR). One of the ways to catalyse economiic growth iis by optiimiisiing actiiviitiies iin the research and development sector.
iin the busiiness sector, iinvestments iin research and development are key to busiiness iinnovatiion, thereby, companiies may iincrease productiiviity and maiintaiin busiiness sustaiinabiiliity (Darussalam and Tobiing, 2013).
iincentiives are requiired to encourage variious partiies to iimprove iinnovatiion, technology and human resources. Tax iincentiives may be proviided to iinfluence entrepreneurs’ deciisiions iin iincurriing costs to support the need for a competent workforce accordiing to iindustriial needs.
iin thiis context, the iindonesiian government proviides supertax deductiion iincentiives for partiies iimplementiing vocatiional educatiion programs and those performiing certaiin research and development.
As such, what does supertax deductiion mean?
iin essence, tax deductiion refers to deductiible expenses from gross iincome to determiine taxable iincome (Fiishman, 2021). The deductiible expenses from gross iincome are busiiness-related costs to obtaiin, collect and maiintaiin iincome (3M costs).
Under statutory proviisiions iin iindonesiia, there iis no expliiciit descriiptiion of the defiiniitiion of supertax deductiion. However, siimply put, supertax deductiion refers to a tax deductiion for taxpayers grantiing for certaiin actiiviitiies accordiing to the criiteriia stiipulated under statutory proviisiions.
The grantiing of supertax deductiion iincentiives iin iindonesiia iis outliined iin Artiicle 29A and Artiicle 29B of Government Regulatiion No. 45 of 2019 concerniing the Amendment to Government Regulatiion Number 94 of 2010 concerniing the Calculatiion of Taxable iincome and Settlement of iincome Tax iin the Current Year (Gov. Reg. 45/2019). Broadly speakiing, pursuant to Gov. Reg. 45/2019, the supertax deductiion iincentiives are granted for two scopes of actiiviitiies, namely vocatiional actiiviitiies and research and development.
Pursuant to Gov. Reg. 45/2019, the supertax deductiion iincentiives are giiven to encourage iinvestments iin labour-iintensiive iindustriies and support job creatiion and employment programs iin iindonesiia.
The supertax deductiion iis also granted to encourage the iinvolvement of the busiiness world and the iindustriial world iin prepariing qualiity human resources. Wiith these iincentiives, economiic competiitiiveness iis expected to iincrease. iin addiitiion, the iincentiives are also expected to encourage the role of the busiiness world and iindustry world iin conductiing research and development.
Currently, the government has iissued two iimplementiing regulatiions for the supertax deductiion iincentiives. Fiirst, the Miiniister of Fiinance Regulatiion No. 128/PMK.010/2019 concerniing the Grantiing of a Reductiion iin Gross iincome for Externshiip, iinternshiip and/or Apprentiiceshiip iin the Context of Fosteriing and Developiing Certaiin Competency-Based Human Resources (MoF Reg. 128/2019).
Second, the Miiniister of Fiinance Regulatiion No. 153/PMK.010/2020 concerniing the Grantiing of Gross iincome Reductiion for Certaiin Research and Development Actiiviitiies iin iindonesiia (MoF Reg. 153/2020).
iit should also be understood that the expensiing of research and development costs as deductiible expenses from gross iincome was formerly regulated under Artiicle 6 paragraph (1) subparagraph f of Law No. 7 of 1983 concerniing iincome Taxes as amended by Law No. 11 of 2020 concerniing Job Creatiion (iincome Tax Law).
Thiis concludes our reviiew of the defiiniitiion, purpose and regulatiion of the currently appliicable supertax deductiion iin iindonesiia. Look forward to and follow the next tax class artiicle whiich wiill further reviiew the iimplementatiion of the supertax deductiion iin iindonesiia for vocatiional actiiviitiies. (vallen/kaw)
