THE USE OF ECONOMETRIC MODELS TO DETERMINE TAX INCENTIVES FOR INVESTORS

Abstract

This research aims to examine how tax incentives influence investors' decisions to invest in Indonesia and determine the appropriate amount of tax incentives that should be offered. Research Objective: To create an econometric model for providing incentives for investors so that investors are willing to invest their capital in Indonesia. Methodology: Design an econometric model and test it with financial report data from a coal mining company in Indonesia considering the high level of risk. Findings: The results of the model test showed that companies operating in the coal business sector require a tax incentive of 73.7% of the tax rate to attract investors. Practical Implications: It is hoped that with this research the Indonesian Government can provide tax incentives for investors so that investors are interested in investing their capital in Indonesia.