Plant Investment Cost in Land Tax Valuation for Plantations

According to Ministry of Finance Regulation No. 186/2019, amended by PMK 234/2022, Plant Investment Cost (BIT) is the total labor, material and equipment expenses incurred for land clearing, planting and maintaining crops. BIT is a component in determining the Taxable Object Sale Value (NJOP) for Land and Building Tax in the plantation sector (PBB‑P5L).

NJOP for plantations is assessed using the cost‑approach method, where BIT serves as the basis. The amount of BIT varies by Regional Tax Office and is adjusted for crop type and age, for example one‑year‑old cocoa versus older cocoa, or short‑cycle crops such as sugarcane versus long‑cycle crops like oil palm and rubber.

For plantation taxpayers, BIT influences the NJOP that forms the basis of annual PBB liability, so changes in BIT can affect tax burden. Clear BIT guidelines enable farmers and plantation companies to plan investments and comply with tax obligations more accurately.