Government Speaks Out on 0 Percent to 50 Year Tax on PFII

Directorate General of Taxes (Photo: Dok. Antara)

JAKARTA - The Directorate General of Taxes of the Ministry of Finance confirmed the plan to provide an income tax (PPh) incentive of 0 percent for financial services business actors operating in the Indonesian International Financial Center (PFII).

Director General of Taxes Bimo Wijayanto explained that the government is preparing technical rules regarding the provision of tax incentives in PFII and the provisions will be further regulated through the Minister of Finance Regulation (PMK), including arrangements for professions or activities that do not obtain tax exemptions.

According to Bimo, not all parties operating in the PFII will enjoy the 0 percent tax incentive for 50 years and the facility is guaranteed not to apply to all types of activities or professions in the area such as experts or professional workers which will be regulated specifically,

"There are some that are regulated separately, not all 50 years. For example, for experts of all kinds, there is a PMK," he told the media, Monday, July 20.

However, Bimo confirmed that the government was indeed preparing a tax incentive policy for business activities in PFII and asked the public to wait for the government's official announcement regarding the details of the policy.

"(There is a 0 percent tax incentive for business activities in PFII?) Yes, wait for the official release," he said.

Bimo also ensured that the incentive scheme would still be adjusted to the provisions of the Global Minimum Tax (GMT) and the international tax commitments that Indonesia has agreed to.

"Yes. The principles that are adjusted to GMT, with global, multilateral commitments must be respected," he said.

Previously, the Chairman of Commission XI of the Indonesian House of Representatives, Misbakhun, revealed that the PFII was planned to be located in Bali as a center for various international financial services activities and the area would be equipped with various incentives, including tax exemptions for up to 50 years to attract foreign investment.

According to Misbakhun, the policy is aimed at attracting investors who have been placing their investments through special purpose vehicles (SPV) in a number of world financial centers such as the British Virgin Islands (BVI) and the Cayman Islands to move to PFII.

"In it, there will be a family office and of course we will give many incentives. The government's 0 percent tax will provide that for up to 50 years," he said at the Investment Forum 2026, Wednesday, July 15.

In addition to tax incentives, PFII is also designed to offer legal certainty through the implementation of a common law system in the settlement of business disputes and the government plans to establish a special court that handles business disputes in the region with the support of experienced and internationally reputable judges.