IKN — The Indonesian Capital City (IKN), which is currently being built in East Kalimantan, is increasingly attracting the attention of micro, small and medium enterprises (MSMEs) in Indonesia.
The latest policy from the Government, through the Minister of Finance Regulation (PMK) Number 28 of 2024, provides tax-free facilities for MSMEs operating in the IKN area, opening up great opportunities for this sector to develop more rapidly.
With a final Income Tax (PPh) exemption of 0 percent for turnover of up to IDR 50 billion per year, this policy offers a very profitable opportunity for MSMEs in the IKN.
The turnover limit which is one hundred times higher than other regions allows business actors to allocate more capital for the development of their business.
Head of the Balikpapan City Youth, Sports and Tourism Service, Cokorda Ratih Kusuma, welcomed this policy positively.
“This policy is expected to spur MSMEs to develop more rapidly, while also encouraging business actors who are hesitant to invest in this new area,” he said.
With the tax incentives provided, the IKN not only has the potential to become the center of Indonesia’s future government, but also an economic superhub that provides great opportunities for MSMEs to grow.
Young Expert Tax Counselor of the Directorate General of Taxes, Rumadi, explained further about this incentive.
“The government provides a zero percent tax rate for turnover of up to IDR 50 billion per year for MSMEs operating in the IKN,” he said.
In addition, Rumadi added, companies investing in the IKN will also receive tax and import duty exemption facilities, as well as other incentives designed to support economic growth in the IKN.
Meanwhile, the DJP’s Middle Expert Tax Counselor, Yudha Wijaya, emphasized that the main requirement to obtain this incentive is that MSMEs operate and are domiciled in the IKN, and are registered at the IKN regional tax office.
“MSMEs registered as taxpayers in the IKN can take advantage of this tax facility as long as they meet the existing provisions,” he explained.
The government’s policy under President Prabowo’s leadership is expected to accelerate the development of the IKN as a new economic center.
At the same time, the policy is expected to provide significant impetus for the development of MSMEs which are the backbone of the Indonesian economy.