Jakarta, Sept. 16 -- Indonesia's Finance Ministry has outlined four principles for designing effective tax incentives: international alignment; strategic relevance; timely, targeted and temporary measures; and continuous evaluation.

"We believe there are at least four things that can serve as the main pillars of good tax incentive policy," Finance Ministry special staffer for taxation Yon Arsal said at the International Tax Conference 2026 on Wednesday.

On the first pillar, Arsal emphasized the importance of aligning tax incentives with developments in global tax regulations, including the Global Minimum Tax (GMT).

The GMT, which sets a minimum effective tax rate of 15 percent, affects the use of traditional tax holiday and tax allowan...