Indonesian Finance Minister, Sri Mulyani Indrawati said that the government is preparing tax deductions for research or innovation by companies, including pharmacies which are currently focusing on inventing the Covid-19 vaccine. That was stated by Minister Sri Mulyani in an online press meeting on the October State Budget in Jakarta on Monday (19/10). She added that the government is expecting Indonesian pharmaceutical companies to use the moment of Covid-19 and various incentives from the government, including the super tax deduction.
She further remarked that pharmas which are conducting research on Covid-19 vaccine are included in the criteria to receive the tax incentive. With the tax stimulus, Indonesian pharmas are expected to increase the capacity and ability of Indonesian pharmaceutical industry.
The former Managing Director of the World Bank Group is optimistic that the national pharmaceutical industry has the potential to become a global player, because Indonesia is one of the countries with great size in economy and population. Minister Sri Mulyani also said that countries with strong pharmaceutical industry can obtain or keep finding solutions for pandemic and establish their leadership at global level.
Previously on October 9 2020, she issued Finance Minister Regulation (PMK) No. 153/2020 on Reduction in Gross Income for Particular Research and Development Activities in Indonesia.
In the Finance Minister Regulation, taxpayers who conduct particular research and development activities in Indonesia will be granted gross income reduction for 300 percent maximum. First, there is the gross income reduction amounting to 100 percent from total cost spent for research and development. Second, there is additional reduction up to 200 percent from cost accumulation spent for research and development in certain periods. The research and development activities include pharmaceutical ingredients, pharmaceutical for human, traditional medicine, phytopharmaceuticals industry, natural extract and ingredients industry, as well as health and lab equipment.