Indonesia Tax Reform Agenda – Are we on the right track?

Edisi : 18 September 2018
No. 2/2018

The government ensures that tax reform will continues in order to boost economic growth. This was conveyed directly by  Sri Mulyani Indrawati, the Indonesia Minister of Finance during a seminar held by APINDO, the Indonesian Association of Entrepreneurs on Friday, 14th Sept 2018. “I am preparing for the completion of the revision of tax bill because reducing the tax rate requires the amendment of   the (tax) law, not just by way of the issuance of ministry regulation” she continued her speech.

The revision of the Law on Income Tax (PPh), is also a priority from the government following a  tendency for  similar rate  reduction trend carried out by Trump administration in US.  “A simulation that has been carried out on how the reduced rate will accelerate  the economic growth.  However,  the impact of the policy, said Sri Mulyani, was not only in the sector of state revenue, but also in the national economy as a whole.

“So we evaluate and prepare if the 25% tariff for simulated corporate income tax to drop down to 22%, then furthermore to 20%.

“So, for us,  turning  a state budget into negative net flow  (due to the reduction of revenue from tax) is not impossible so long as it rings b the economy to grow even higher, “said Sri Mulyani. Source: several news portal