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Tax incentives, work skills key to competing in AEC: Economist
Indonesia needs to reform taxation and vocational training to boost the competitiveness of local businesses in the ASEAN Economic Community (AEC), according to an economist.
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span style="line-height: 1.6em;">Indonesia needs to reform taxation and vocational training to boost the competitiveness of local businesses in the ASEAN Economic Community (AEC), an expert has said.
Those issues were crucial to wooing investors to Indonesia, HSBC’s ASEAN economist Su Sian Lim said, adding that Indonesian tax rules were not yet competitive.
Indonesia’s corporate tax was as high as 25 percent, compared to Singapore’s 16 percent and Hong Kong’s 17 percent, Lim said on Thursday.
She added that tax collection was not an issue in Singapore and Hong Kong, as most corporate taxpayers had registered their assets and found paying taxes easy.
Lim lauded the Indonesian government’s plan to introduce a tax amnesty to bring home funds kept by wealthy Indonesian abroad.
According to her, the tax amnesty was good for Indonesia, but should be followed by other reforms to improve collection.
Regarding skilled workers, Lim said educational reform in Indonesia should be carried out quickly to educate workers equipped with adequate skills to cater to demand from technology-based investments.
"Imagine when the big IT companies want to invest in Indonesia and we have a supportive pool of workers," she said. (dmr)
