Indonesian Parliament Calls for Tax Relief for Defense Industry

The House of Representatives’ Commission VII has proposed fiscal support for the domestic defense industry, targeting state‑owned firms PT Dirgantara Indonesia, PT PAL and PT Pindad. The proposal was presented on 9 December 2025.

Commission VII Chair Saleh Partaonan Daulay suggested tax relief, including VAT exemption, as stipulated in Minister of Finance Regulations (PMK) 157/2023 and 45/2025. The exemption covers weapons, ammunition, bullet‑proof helmets, special vehicles, radars and spare parts, but applies only to imports made by the Ministry of Defense, defense‑related state enterprises, or designated entities. Although such exemptions exist, the latest regulations clarify the scope.

The DPR expects the measures to boost the competitiveness of Indonesia’s defense sector within ASEAN and the global market. The commission also calls for direct dialogue with the Ministry of Finance to ensure proper implementation.