Indonesia plans Rp632 trillion in tax incentives for 2027
Finance Minister Suahasil Nazara said manufacturing, agriculture and trade were expected to be major users of the incentives.
Indonesia plans to provide Rp632 trillion in tax incentives in 2027, equivalent to 2.26 per cent of its gross domestic product, Finance Minister Suahasil Nazara said on 30 October 2026.
Speaking at KADIN’s national leadership meeting at Hotel Borobudur, Suahasil said the relief would support households, micro, small and medium-sized enterprises, businesses and investment. He said the aim was to preserve purchasing power while sustaining growth and competitiveness.
The incentives involve the government forgoing tax collection or granting exemptions, he explained. Manufacturing, agriculture and trade are expected to be major beneficiaries in 2027, consistent with the estimated pattern of support in 2026.
Suahasil put estimated tax incentive expenditure for 2026 at Rp576.4 trillion, or 2.24 per cent of GDP. Manufacturing received the largest amount among sectors, at Rp137.2 trillion, followed by agriculture with Rp60.5 trillion and trade with Rp55.3 trillion.
Examples of relief provided during 2026 included tax holidays for pioneer manufacturing industries, income tax exemptions on dividends and the non-application of value-added tax to public transport services. Suahasil said tax support was tailored to each sector’s characteristics, particularly to strengthen business productivity and competitiveness.
