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Indonesian TPT sector happy with tax break

The textile and textile product industry (TPT) is one of the main drivers of Indonesia’s exports. The government provides an incentive of corporate income tax by 30 per cent for 6 years or 5 per cent annually. This incentive is needed for the domestic TPT industry to be competitive. Anne Patricia Sutanto, VP, Director of PT Pan Brothers Tbk (PBRX) says the tax incentive is like a breath of fresh air for this sector, however, the government must be serious in implementing these rules.

As an export-oriented textile industry player, it asks for a government reference effort with all competitor countries so that all government policies related to the textile industry can be competitive. The government should also look at the dynamics in the global textile industry to take advantage of opportunities in future because this sector is stable and can be one of the pillars of Indonesia's development efforts.

Sutanto says what is important to them is the seriousness of the government in negotiation FTA with the EU, Canada, Mexico and Asian countries as a whole. In addition, the government must also build a vocational school for textile industry equipped with industry-based curriculum facilities. Although the conditions are not yet ideal, PBRX set a growth target at 12 to 15 per cent this year.

Bhima Yudhistira Adhinegara, Economist of the Institute for Development of Economics and Finance (INDEF) says the regulation is timely. The reason for global textile demand is currently recovering and this year TPT exports are good prospects, so it can be a stimulus for production. The current fiscal incentives are needed to encourage investment in the textile sector, especially investments in the opening of new factories or the reversal of old textile machinery that has been less productive.