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Indonesia Offers Tax Cuts to Lure Investors to New Capital

  • Minimum 10 billion rupiah investment eligible for lower rates
  • New rule issued on March 6 and takes effect immediately
Titik Nol Nusantara (ground zero Nusantara), the future capital city for Indonesia, in East Kalimantan.

Titik Nol Nusantara (ground zero Nusantara), the future capital city for Indonesia, in East Kalimantan.

Photographer: Bagus Saragih/AFP/Getty Images

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Indonesia lowered taxes on some investments and sweetened land acquisition terms as part of efforts to attract funds for its $34 billion new capital project that’s struggling to take off.

The government will provide up to 100% corporate tax holiday for companies investing at least 10 billion rupiah ($650,745) in the new capital in Borneo, according to a new rule announced March 6. It also exempts individuals working and living in the new city from income tax, among other perks offered for a maximum 30 years.