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Jakarta Post

‘Indonesia means business' in tax overhaul ​​​​​​​

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Thu, September 5, 2019   /  07:20 am
The Jakarta Post Image
Finance Minister Sri Mulyani Indrawati (center), accompanied by the ministry’s taxation director general, Robert Pakpahan (right), treasury director general Marwanto Harjowiryono (second right), Fiscal Policy Agency head Suahasil Nazara (left) and budget director general Askolani, interacts with the press in this file picture.(Antara/Aprillio Akbar)

The government plans to gradually slash corporate income tax and require foreign entities to collect value-added tax (VAT) from domestic economic activities in a planned new tax bill that is expected to spur investment and take advantage of the growing digital economy. The government seeks to lower corporate income tax from the current 25 to 22 percent in 2021 and 20 percent in 2023, which would avoid a drastic decrease in tax revenue, said Finance Minister Sri Mulyani Indrawati. The bill, which is still being discussed within government to be deliberated further with lawmakers, would amend parts of the existing Income Tax (PPh) Law, VAT Law and General Taxation Law (KUP) to make Indonesia’s taxation regime more competitive for investors, she added. Sri Mulyani said the new bill would highlight the pro-investment stance the Joko "Jokowi" Widodo administration had...