Minister of Finance Emphasizes No Tax Incentives for SOEs that Carry Out Mergers

JAKARTA - Minister of Finance Purbaya Yudhi Sadewa spoke out regarding the proposal to provide incentives to SOEs which had previously been submitted by Danantara's Chief Executive Officer (CEO), Rosan Roeslani.

He ensured that the government would not provide tax incentives to SOEs that carried out corporate actions, including restructuring and mergers.

"Regarding corporate action tax incentives, we may not give it," said Purbaya at the APBN KiTA press conference, quoted on Friday, December 19.

According to Purbaya, the decision was made after he had a discussion with Danantara some time ago and from the discussion, the government assessed that the corporate action carried out by SOEs under the auspices of Danantara had a commercial business orientation.

"There is a commercial side to it, so we will assess it according to the conditions commercially only," he said.

On the same occasion, the Director General of Economic and Fiscal Strategy of the Ministry of Finance, Febrio Nathan Kacaribu, explained that SOEs often face a capital gain tax burden due to the difference between the book value and the market value of assets during the company merger process.

He added that in many cases, the increase in the value of the assets triggers a considerable tax liability and must be paid at the same time.

According to him, this condition is often a factor that hinders SOEs in continuing the merger plan.

"In this case, what usually happens is the capital gain tax. That is often a barrier for them," he said.

Febrio added that the government actually has regulations through the Minister of Finance Regulation (PMK) regarding the use of book value and this policy is not a tax incentive, but a mechanism to ensure that the imposition of taxes remains in accordance with the amount of capital gains that occur.

"We just give arrangements so that it is not immediately paid in one year, on that one day. We spread according to the depreciation in the future," he explained.

He emphasized that there was no special tax treatment between SOEs and private companies, and this was in line with the position of SOEs, especially Danantara, which is now operating commercially and is expected to be able to create greater added value.