Dairy, Palm Oil Firms Granted Tax Incentives to Help Expansion

BY :DAMIANA SIMANJUNTAK & TABITA DIELA

SEPTEMBER 21, 2015

Jakarta. One dairy and two palm oil companies have been granted tax allowances that will let them enjoy reduced income tax bills for up to 15 years.

Fonterra Brands Manufacturing Indonesia, Wilmar Bioenergi Indonesia and Wilmar Nabati Indonesia were approved for the privilege after a Finance Ministry decree issued recently, according to Industry Ministry official Haris Munandar.

Corporate income tax in Indonesia is typically set at 25 percent, with a discount offered to companies that invest heavily in the country. Haris did not provide details on how much of a discount the companies would enjoy.

Fonterra Brands Manufacturing Indonesia plans to invest $29.6 million for a plant in Bekasi, on the eastern outskirts of Jakarta, to produce powdered milk.

Wilmar Bioenergi Indonesia is pouring $36.1 million into its oil palm plantation in Dumai, Riau province, and Wilmar Nabati Indonesia is investing Rp 828.43 billion ($57 million) for its organic chemical base plant, also in Dumai.

Haris said the government had extended the tax breaks to other companies and was currently reviewing two other requests.

Under the new regulation published this year, corporate taxpayers, especially those that invest in so-called pioneering industries, are eligible to file for smaller income tax payments using several accounting techniques.

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