INNOVATION AND PUBLIC POLICY SUPPORT FOR R&D DONATION AS A FISCAL COST IN INDONESIA

We know that the progress of a nation is also determined by the extent to which the role of research and development (R&D) has colored the life of that country. One indication that the R&D field has been given a strategic and important position in the life of the immediate future is the great support and attention from the Government. The form of support from the Government of course varies from country to country, depending on the capability and the priority scale of the challenges faced. In Indonesia, a concrete form of support from the Government is the provision of research funds through state budget allocations in a number of government-owned research institutions and universities. However, this support is deemed insufficient without involving a wider circle, especially from the business world. In this case, the Government has an instrument that is considered quite effective in encouraging the private sector to play a role in advancing the R&D sector, namely taxation instruments.

The Income Tax Law (Law Number 36 Year 2008) has provided incentives for businesses in the form of imposing fiscal costs in the form of contributions for research and development carried out in Indonesia. The cost of this contribution is deducted from gross income for calculating taxable income. In tax theory, this facility is called tax deduction. With this facility, it is hoped that taxpayers can allocate part of their business operational costs to develop the R&D sector, both for the benefit of their company and for other broader purposes.

In Government Regulation (PP) Number 93 of 2010, technical provisions regarding the contribution of the R&D sector as fiscal costs have been regulated. Where in the PP it is stated that contributions for research and development can be deducted up to a certain amount from gross income in the framework of calculating taxable income. The condition is that the contribution is given for research and development carried out in the territory of the Republic of Indonesia and delivered through research and development institutions. Donations must not cause the company to suffer a fiscal loss. Donations can be made in the form of money and / or goods to third parties who are not related to the company.

So the intent of the Government’s policy in the PP above is very clear, namely to garner greater participation from the private sector in driving the R&D sector in Indonesia. Meanwhile, the objective of this taxation policy is to ensure that there is a transfer of knowledge and technology transfer to Indonesians by requiring the implementation of R&D in the country. In addition, this policy is also to provide greater opportunities for domestic human resources to develop and be competitive. Likewise, the benefits of R&D carried out in Indonesia are expected to drive domestic economic sectors to become more productive. #OurTaxesforUs

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