Income tax incentives on renewable energy industry: Case of geothermal industry in USA and Indonesia

<p>Tax policy is one of the most important policy in consideration of investment development in certain industry. Research by Newlon (1987), Swenson (1994) and Hines (1996) concluded that tax rate is one of the most important thing considered by investors in a foreign direct investment. One of tax policy could be used to attract foreign direct investment is income tax incentives. The attractiveness of income tax incentives to a foreign direct investment is as much as the attractiveness to a domestic investment (Anwar and Mulyadi, 2012). In this paper, we have conducted a study of income tax incentives in food and agriculture industry; where we conduct a thorough study of income tax incentives and corporate performance in Indonesian and Australian food and agriculture industry. Our research show that there is a significant influence of income tax incentives to corporate performance. Based on our study, we conclude that the significant influence of income tax incentives to Indonesian corporate performance somewhat in a higher degree than the Australian peers. We have also concluded that Indonesian government provide a relatively more interesting income tax incentives compare to Australian government. However, an average method of net income –a method applied in Australia– could be considered by Indonesian government to avoid a market price fluctuation in this industry.</p>

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Policy and Strategies of Tariff Incentives Related to Renewable Energy: Comparison between Indonesia and Other Developing and Developed Countries

Supriyanto¹,

Sentanuhady

Hasan

et al. 2022

Sustainability

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The transition from conventional fossil fuels to renewable energy is necessary, along with the increase in energy consumption and the decline in national energy production. In its application, increasing the renewable energy mix has many challenges, especially cost-efficiency. Thus, to make renewable energy competitive and achieve a significant acceleration of the mix, massive energy incentive policies are being studied and developed. This study provided a specific overview of policies and strategies for tariff incentives related to renewable energy, particularly in developing and developed countries. An essential section of this study discusses the comparison between Indonesia and other countries, as well as the current status and an ideal policy related to renewable energy for this country. The implementation of energy incentive policies in each country is quite different, depending on the potential, technological readiness, and political and economic conditions. Compared with other policy mechanisms such as RPS, FIT policies are more efficient at increasing capacity and stimulating R&D inputs to reduce costs. In terms of the stage of economic development and characteristics of the electricity system, the price adjustment model, such as that used in East Asia, is more suitable for application in Indonesia than other models.

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Income tax incentives on renewable energy industry: Case of geothermal industry in USA and Indonesia

Cited by 3 publications

References 4 publications

Alleviating Energy Poverty as Indonesian Development Policy Inputs Post-2015: Improving Small and Medium Scale Energy Development

Alleviating Energy Poverty as Indonesian Development Policy Inputs Post-2015: Improving Small and Medium Scale Energy Development

Indonesian And Australian Tax Policy Implementation In Food And Agriculture Industry

Policy and Strategies of Tariff Incentives Related to Renewable Energy: Comparison between Indonesia and Other Developing and Developed Countries

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