Indonesia Plans Tax Amnesty
World Economy

Indonesia Plans Tax Amnesty

Indonesia will gradually cut its corporate tax rate to discourage companies from booking profits in lower-tax countries such as Singapore, President Joko Widodo’s top aide said.
The government will cut the rate from 25 percent currently to “maybe 17.8 or 17.5 percent,” Luhut Panjaitan, the president’s chief of staff, said in an interview in Jakarta on May 8. The move adds to plans for a tax amnesty for citizens as the government tries to lift revenue collection, Bloomberg reported.
“We’re going to do it, it’s already being ordered by the president,” Luhut, 67, said at his office in the state palace. “It’s not going to be too much gap from Singapore,” said Luhut, a former ambassador to the neighboring city-state.
Widodo, known as Jokowi, is focusing on shoring up state coffers as he seeks funds to improve the nation’s infrastructure and reach growth of 7 percent. A decline in government spending contributed to a further slowdown in Southeast Asia’s biggest economy last quarter, and Indonesia’s tax collection is falling short of target so far this year.
Economic growth, which cooled to a more than five-year low of 4.7 percent from a year earlier in the three months through March, could recover to 5.3 percent this quarter after the government started to spend its budget in April, Luhut said. The effects of increased state spending will be seen in June or July, he said.
The tax cuts will narrow the gap with Singapore’s rate of 17 percent to stop “transfer pricing,” Luhut said. The term typically refers to the practice of companies transferring goods to a parent overseas before selling internationally and then paying a different tax rate on profits abroad.


Short URL : http://goo.gl/kSn6H3

You can also read ...

Close to 40% of digital transformation initiatives will be supported by AI capabilities.
The digital economy in Asia-Pacific, or APAC, is expected to...
An electronic stock indicator of a securities firm in Tokyo.
As investors come to terms with the impending end of easy...
Most economists would agree that Italy needs faster economic growth if it is to resolve its public debt  and banking-sector problems in an orderly manner.
Italy’s economy is growing again, but it’s still the worst...
Maersk is expanding its competitive universe to include different types of companies.
The world’s largest container company will start looking for...
Lloyds Profits Miss Forecasts
Lloyds Banking Group PLC raised its 2017 dividend by 20% and...
NZ Says Pacific Trade Deal Will Boost GDP
New Zealand estimates a Pacific trade deal would boost its...
CBs May Top Inflation Targets
Not only will central banks meet their inflation targets, they...
Pak Current Account Gap Widens
Pakistan’s current account deficit widened 28.74% on a month-...