Journal of Economic, Finance Research and Review (JEFRR)

A Systematic Literature Review on the Implementation and Impact of Tax Holiday Policy in Indonesia

Achmad, Abd Hakim, Vionda, Ikhram

31 January 2026 · Vol. 2, Issue 1, pp. 58-65

DOI: 10.65150/EP-jefrr/V2E1/2026-07

Abstract

The implementation of tax holiday policy in Indonesia represents one of the most strategic fiscal instruments used to enhance competitiveness and attract long-term investment. This study aims to synthesize and evaluate the implementation and economic impact of Indonesia’s tax holiday policy through a Systematic Literature Review (SLR) based on PRISMA protocol, covering 25 peer-reviewed studies published between 2015 and 2025. The selected literature includes both international journals and nationally accredited (SINTA 1-3) publications, analyzed through thematic and bibliometric methods. The findings indicate that tax holidays have generally contributed to increased foreign direct investment inflows, particularly in capital-intensive industries, yet their fiscal and regional effects remain uneven. The policy’s effectiveness is largely determined by institutional quality, administrative consistency, and macroeconomic stability rather than by tax reduction alone. This review concludes that while tax holidays remain relevant as an investment stimulus, they require integration with broader fiscal and governance reforms to sustain their impact. The study contributes to the academic and policy discourse by presenting an evidence-based synthesis of Indonesia’s fiscal competitiveness strategy and identifying methodological gaps for future research.

Keywords: Tax holiday, fiscal policy, foreign direct investment, Indonesia, systematic literature review

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Achmad, Abd Hakim, Vionda, & Ikhram (2026). A Systematic Literature Review on the Implementation and Impact of Tax Holiday Policy in Indonesia. Journal of Economic, Finance Research and Review, 2(1), 58-65. https://doi.org/10.65150/EP-jefrr/V2E1/2026-07

@article{Achmad2026,
  title   = {A Systematic Literature Review on the Implementation and Impact of Tax Holiday Policy in Indonesia},
  author  = {Achmad and Abd Hakim and Vionda and Ikhram},
  journal = {Journal of Economic, Finance Research and Review},
  year    = {2026},
  volume  = {2},
  number  = {1},
  pages   = {58-65},
  doi     = {10.65150/EP-jefrr/V2E1/2026-07},
  url     = {https://doi.org/10.65150/EP-jefrr/V2E1/2026-07}
}

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