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Indonesia to allow establishment of local shell companies
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President Joko Widodo talks with tax office director general Ken Dwijugisteadi (right), while Finance Minister Bambang Brodjonegoro (left) sits near them, in Jakarta on March 29. (ANTARA FOTO/Yudhi Mahatma)
T
he high numbers of Indonesian businesspeople setting up shell companies in tax-haven countries has led the government to allow the creation of such corporations in Indonesia.
Finance Minister Bambang Brodjonegoro said the government would arrange one special region in the country that would provide several facilitations and incentives such as those found in the tax haven countries.
“One thing for sure, this region will be dedicated to those who want to create shell companies similar to the offshore ones,” he said as quoted by kontan.co.id on Monday in Jakarta, declining to elaborate more on the details of the plan.
With this zone available, Bambang said he expects businesspeople wouldn’t have to go abroad to create special purpose vehicles (SPV) for their financial and business transactions.
The government, according to him, found that Indonesian businesspeople had at least 5,000 shell companies abroad, which were sometimes used to avoid paying taxes.
The data leaked in the Panama Papers in April showed about 800 Indonesians to be the principal owners of shell companies in other countries. (ags)
