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Indonesia eyes lowering corporate income tax to 10%
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A tax officer talks to a taxpayer at a tax office branch in Blitar, East Java, on Wednesday. (Antara Photo/Irfan Anshori)
F
inance Ministry’s taxation director general Ken Dwijugiasteadi expresses hope that corporate income tax can reach as low as 10 percent, from the current 25 percent, in the anticipated revision of the Income Tax Law.
The government, he said, would bring the proposal to the House of Representatives should the latter give the nod for the revision of the law.
“We also look at the country’s tax base. If it’s already high, it [the corporate income tax rate] can be lowered to up to 10 percent like value-added tax rate, let alone 17 percent,” Ken said on the sidelines of a tax amnesty dissemination event in South Jakarta.
To support the implementation of the newly passed Tax Amnesty Law, the government plans to revise laws concerning general taxation, income tax and value-added tax. The government has proposed to the House the revised draft of the General Taxation Law.
Previously, President Joko “Jokowi” Widodo told crowds at a dissemination event in Semarang, Central Java, on Tuesday that it would be possible for the country’s corporate income tax to initially go from 25 percent to 20 percent, before finally reaching the 17 percent rate.
Singapore, which is widely known as among wealthy Indonesians’ safe haven countries, applies a 17 percent corporate income tax rate.
Finance Minister Sri Mulyani Indrawati told journalists on Wednesday that the government would carry out further assessment on the proposed tax rate cut.
“The spirit [of the policy] is to make Indonesia a competitive country,” she said.
