Director general for taxation Darmin Nasution told reporters that President Susilo Bambang Yudhoyono signed a decree authorising the incentives on January 1, with immediate effect.

"The purpose of the decree is to attract investment in certain industries as well as to stimulate growth of investment in certain regions," Nasution said.

Industries that will receive tax incentives include textiles, chemicals, pulp and paper board, pharmaceuticals, rubber products, iron and steelmaking, electronics, and component products for land transportation.

Nasution said tax incentives would be provided to both domestic and foreign parties, either for new investment or expansion of existing plants.

The incentives would include tax allowances and lower taxes on dividends paid to foreign groups.

Tax incentives, however, would not be given to industries that have previously obtained perks, such as companies located in bonded or industrial zones.