To Align with Industry Needs, Government Evaluates List of Competencies for Tax Incentives

The government is evaluating plans to revise the appendix to Regulation of the Minister of Finance No. 128/PMK.010/2019 on Granting of Deduction in Gross Income for the Organization of Work Practice, Internship, and/or Learning Activities in Relation to the Building and Development of Certain Competence-Based Human Resources (“Regulation 128/2019”). This plan is necessary to optimize the use of the Super Tax Deduction (“STD”) incentive for the industrial sector.

“It needs to be evaluated—including the list of competencies that will be included—to determine whether it remains appropriate or if additions or deletions are necessary,” said Aditya Nurma Febrianto, a Policy Analyst at the Directorate of Tax Strategy, Ministry of Finance.

He explained that this evaluation aims to ensure the list of competencies in the appendix to the Regulation remains relevant to national priorities. He noted the need to review whether the current list of competencies requires additions or deletions to make it more adaptable to future needs.

Hadi Raharja, a Junior Expert Planner at the Ministry of Manpower, stated that the low level of industry participation is believed to stem from the limited scope of the competency list in the current regulations. He emphasized that expanding the list of competencies is crucial for strengthening the “link and match” synergy between vocational education institutions and industry needs.

“Policy implementation should be directed toward evaluating and expanding the list of competencies for incentive recipients so that it is more adaptable to industry needs,” he added.