Jakarta. Indonesia's tax chief on Monday clarified that the government's proposed 0% income tax incentive for up to 50 years at the Indonesia International Financial Center (PFII) will not automatically apply to all businesses and professionals operating in the zone.

Director General of Taxes Bimo Wijayanto said the incentive would vary depending on the type of taxpayer and business activity, with detailed eligibility criteria, recipients, and the duration of the facility to be stipulated in implementing regulations.

"This needs to be clarified. Different provisions apply, so it won't be 50 years for everyone," Bimo told reporters at the House of Representatives complex in Jakarta.

He said tax treatment for experts and skilled professionals would be regulated separately under a Finance Ministry regulation.

"For example, tax provisions for experts will be covered under a separate ministerial regulation," he said.

Bimo's remarks seek to dispel the perception that all companies, professionals, and other parties operating in PFII would automatically qualify for a 50-year income tax exemption.

He confirmed that the government is preparing a 0% income tax incentive for certain business activities within PFII, but said the Directorate General of Taxes has yet to announce the eligible sectors or the full incentive scheme.

"Yes, please wait for the official announcement," Bimo said.

He also stressed that any tax incentives offered under PFII would remain aligned with the Global Minimum Tax (GMT) framework.

"Yes. The principles of alignment with the GMT and our global and multilateral commitments must be respected," he said.

PFII is being developed as a specialized financial hub for international financial services and globally oriented businesses, with tax incentives among the measures to attract investment and strengthen Indonesia's competitiveness as a regional financial center.

Earlier, Rahma Gafmi, an economics professor at Airlangga University, urged the government to exercise caution in offering tax incentives of up to 50 years at PFII. She argued that such a long-term commitment could expose Indonesia to fiscal risks if global tax rules become more stringent in the future, while the economic gains may not justify the forgone tax revenue.

Rahma also warned that generous tax breaks without strict economic substance requirements could create perverse incentives, allowing shell companies to establish a presence in PFII solely to benefit from the tax regime. Such a scenario, she said, could tarnish Indonesia's reputation by creating the perception of a tax haven or even increasing the risk of the country being placed on the Financial Action Task Force (FATF) grey list, potentially deterring institutional investors that prioritize compliance and environmental, social, and governance (ESG) standards.

She added that Indonesia's biggest obstacle to attracting investment is not tax rates but legal certainty, pointing to overlapping regulations, weak protection of property rights, and uncertainty over contract enforcement as the issues that most concern investors.

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