The Indonesia Stock Exchange (IDX) will give special incentives for tax amnesty participants to cross trade on the stock market using repatriated assets, a move aimed at changing the ownership of shares.
IDX director Nicky Hogan said one well-known tax evasion method was through stock buying under a third party’s name, be it a driver or maid. To declare the assets, as stipulated by the tax amnesty program, tax evaders must change it back to their name through a cross trade.
“We will give incentives so that cross trading does not have to be conducted using cash. People will only need to report that the purpose of the cross trading is asset declaration, then the broker can directly proceed with the transaction,” he said in a discussion on the tax amnesty in Jakarta on Tuesday.
IDX will also give a transaction-fee discount. In an ordinary situation, investors have to pay a fee of around 0.2 percent of the total transaction to the broker, including a 0.03 percent fee to IDX and 0.01 percent fee to the Indonesian Stock Market Clearing House (KPEI).
“We will cut the 0.03 percent fee of cross trading transactions that are part of the tax amnesty program, but the exact total discount will be decided later,” Nicky said.
Nicky added that the tax amnesty program might lead to larger stock buying by domestic investors as tax evaders who previously put their money abroad shifted their assets into Indonesia’s stocks. Currently 64 percent of stocks traded at the IDX are owned by foreign investors. (ags)