With GMT, Government Reviews Tax Incentives to Attract Investors
JAKARTA, DDTCNews - The government continues to target foreign investment to drive the development of high-value-added industries and accelerate the downstream processing programme.
The Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono, stated that the Government needs to prepare competitive fiscal incentives to attract investors. However, the design of such incentives must also take into account developments in global tax rules, including the implementation of the global minimum tax (GMT).
"The government is continuously strengthening investment competitiveness through a review of various fiscal incentive schemes," he said in an official statement, cited on Wednesday (7/10/2026).
According to Susiwijono, the implementation of the GMT with a minimum effective tax rate (ETR) of 15% could affect the effectiveness of a number of tax incentives that have long been used to attract investment, including tax holidays.
The government therefore needs to review the design of fiscal incentives to ensure Indonesia remains attractive as an investment destination, whilst at the same time not running counter to developments in international tax standards.
He expressed hope that future adjustments to fiscal incentive policy would preserve investment attractiveness whilst remaining in line with developments in international tax standards.
Indonesia has committed to following the international tax provisions contained in Pillar Two: the Global Anti-Base Erosion Rules (GloBE). The technical provisions on the GMT are regulated through MoF Reg. 136/2024.
Technically, the GMT is a mechanism that ensures a multinational enterprise group (MNE Group) with consolidated gross turnover of at least EUR750 million pays tax at a minimum rate of 15% in every jurisdiction in which the group operates.
If the effective tax rate (ETR) borne by an MNE Group in a given jurisdiction falls below 15%, a top-up tax will arise.
The government has long offered tax holidays as one instrument for attracting investment. However, the existence of the GMT regime means the Government needs to re-evaluate what types of incentives are most appropriate to offer investors.
A tax holiday is a profit-based incentive. Under the GMT regime, the benefit of such incentives risks becoming less effective, since the tax that a company would otherwise have saved through these facilities may still be collected in the form of a top-up tax by another jurisdiction.
Nonetheless, the government has not yet decided to discontinue the granting of tax holidays.
Previously, the Ggvernment also stated that it was still reviewing tax incentive schemes compatible with the implementation of the GMT.
In addition to fiscal incentives, Susiwijono noted that expanding market access through international trade cooperation is an important instrument for enhancing the competitiveness of domestic industry whilst simultaneously attracting investment.
In his view, current global trade dynamics allow Indonesia to attract new investment. The government can target investors seeking alternative suppliers or production bases amid trade tensions and tariff policies in a number of countries.
Overall, the government continues to strengthen the downstream processing ecosystem and high-value-added industries through 4 strategies: strengthening investment, offering competitive incentives, enhancing the domestic supply chain and expanding market access.
He is confident that these various efforts will enhance the competitiveness of domestic industry whilst also strengthening economic resilience amid global turbulence.
"This is what we continue to drive, so that we gain two benefits at once. First, opening broader market access for Indonesian products. Second, making Indonesia increasingly attractive to investors," he concluded. (dik)