BKPM Pushes for Broader Tax Incentives for Seaweed Downstreaming
JAKARTA, DDTCNews - The Ministry of Investment and Downstream Industry/Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal/BKPM in Indonesian) is pushing for the expansion of fiscal incentives to attract investment in the seaweed downstream sector.
The Director of Fisheries and Maritime Downstream at the Ministry of Investment and Downstream Industry/BKPM, Mohamad Faizal, said that more attractive fiscal incentives are needed to encourage investors to develop seaweed derivative products in Indonesia. Currently, the tax allowance facility for the seaweed downstream industry has only been granted to the refined carrageenan industry.
"We need fiscal incentive support for entrepreneurs for the development of seaweed. Of course, if we invite entrepreneurs, we need a sweetener for the investors to come to Indonesia and invest," he said at the National Seaweed Forum 2026, as quoted on Friday (16/10/2026).
In his presentation, Faizal outlined 3 fiscal facility schemes that can support the development of the seaweed downstream industry. First, a tax allowance under Gov. Reg. 78/2019, in the form of a net income reduction of 30% of the total investment in tangible fixed assets including land, charged over 6 years at 5% per year each.
In addition, investors may also receive accelerated depreciation on tangible fixed assets and accelerated amortisation on intangible fixed assets acquired in the context of investment. Further, an income tax rate on dividends of 10% or a lower rate under an applicable tax treaty is also available as well as an extension of fiscal loss carry-forward compensation for 5–10 years pursuant to the applicable provisions.
Second, import duty exemption under MoF Reg. 176/2009, as last amended by MoF Reg. 188/2015. This facility covers imports of machinery as well as goods and materials for the construction or development of industry in the context of investment. The import duty exemption is granted for 2 years or 4 years for companies that use locally produced machinery of a minimum of 30%, subject to the applicable requirements.
Third, a supertax deduction under Gov. Reg. 45/2019. This facility takes the form of a gross income reduction of up to 200% of the expenses of vocational education and training activities and up to 300% of the expenses of certain research and development activities in Indonesia. These incentives are expected to encourage the development of workforce competencies whilst also boosting research and innovation activities in the industry.
BKPM records that the tax allowance facility specifically granted for the seaweed downstream industry applies only to refined carrageenan products. Therefore, the expansion of incentives to other derivative products remains an aspiration to enhance the attractiveness of investment in the sector.
Faizal hopes that the tax facilities available will eventually cover not only the refined carrageenan industry but also other seaweed derivative products. As such, investment in seaweed processing can grow and generate greater added value domestically.
According to him, seaweed downstream development is in line with the directive of President Prabowo Subianto, who wishes for downstream development to focus not solely on the energy and mineral sectors but to be extended to the agricultural and fisheries sectors as well.
"Indeed, when we hear the word downstream these days, it is largely associated with mining; nickel, tin, copper and so forth. However, we must already begin shifting to other commodities, namely plantation and fisheries commodities, specifically seaweed," he said.
He explained that seaweed is among the 15 priority downstream commodities listed in the National Medium-Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional/RPJMN in Indonesian) 2025–2029. The government is targeting seaweed downstream investment of IDR2.79 trillion during that period.
Based on BKPM data, the realisation of seaweed downstream investment in the first half of 2026 reached IDR232 billion, or approximately 43.8% of this year's investment target of IDR530 billion.
Faizal considers that the development of seaweed downstream must be carried out in an integrated manner alongside the strengthening of the upstream sector. This is because the availability of raw materials is one of the key factors in supporting the sustainability of the processing industry.
According to BKPM records, the fisheries sector recorded 12,898 investment projects in the first half of 2026. However, the investment value reached only IDR2.1 trillion, or approximately 0.21% of the total national investment realisation of IDR1,010.6 trillion. This places the fisheries sector in 23rd position by investment value.
According to Faizal, the large number of projects in the fisheries sector has not been matched by significant investment value because the project scale is relatively small. Therefore, strengthening the upstream sector is expected to drive increased investment in the fisheries processing industry, including seaweed. (dik)