Indonesia: The Effect of Tax Holiday on Economic Growth Related to Foreign Investment

Nuraini Sari; Maya Safira Dewi; Yen Sun
Finanace Program, Accounting Department, Faculty of Economics & Communication,
Bina Nusantara University, Jakarta, Indonesia 11480

Abstract

This paper will analyze the implementation and the impact of tax holiday policies from the perspective of foreign investment and tax revenues in Indonesia. The results showed that tax holiday is considered to give effect to the increasing in investment activities in Indonesia and it will not have a negative effect in the form of the loss of tax revenue. Tax holiday policy is considered capable to provide a positive impact on investment activities in Indonesia, but Indonesia still has to give priority to the improvement of infrastructure and bureaucracy.

Keywords : Tax incentives; Tax revenue; Fiscal policy; Foreign Investment

https://www.sciencedirect.com/science/article/pii/S1877042815054749

By Maya Safira Dewi