Although the provisions regarding the provision of incentives to investors in the form of tax holiday is not regulated in the Law on Taxation, the government still considered to provide such tax breaks from next year.

Minister of Industry M.S. Hidayat1 said he had discussed this with Finance Minister Sri Mulyani Indrawati. "Finance Minister basically agreed and will be prepared for the 2011 budget. We (the Ministry of Industry] is given time for a month to formulate anything just to be given," he said in a welcome ceremony at the reception to the Japanese Embassy in Tokyo, yesterday afternoon.

Industry Minister to visit Japan to attend the Asian Business-Summit that has been going on since Wednesday last week. He added insentif1 form of tax holiday will be given to sectors that require investment in large numbers, such as the development of CPO derivatives industry, industries that require technology transfer and industrial development in disadvantaged areas.

Tax holiday incentives granted to investors in the form of exemption of income tax payment (tax) within a certain timeframe. "Although Iketentuan question) tax holiday has been revoked in Tax Law, the provisions that exist in the Investment Act," he said.

Industry Minister said he was asked to consider the development of derivatives industry (downstream) from a number of industries, so that Indonesia no longer exports in the form of raw materials or semi-finished materials. One of the industries that will be developed are products derived from crude palm oil (CPO).

"It takes a great incentive because it is a new thing. So, it should appeal to investors who take risks to develop it. I propose that income tax free for 5 years. SecTreas basically agree," said Hidayat.

Geographical territory of Indonesia, which makes greater logistical connections compared with other countries, is also one consideration for providing these incentives. "So, lin-holiday or whatever it's called, in principle has been considered and will be discussed," he asserted.

Some time ago, the head of the Ministry of Finance of fiscal policy Anggito Abima said Indonesia had no legal basis to provide tax holiday to investors. Meanwhile. Minister of Industry, adding he will also meet with former Japanese Prime Minister Taro Aso to discuss the business relationship. "The plan we will meet tonight [last night]. They are interested in investing in the fishery."