Indonesian Finance Minister Sri Mulyani Indrawati (right). (Source: Antara)
Jakarta (VNA) - The Indonesian government plans togradually lower corporate income tax to attract mor💫e investment and boost thecountry’s cooling econo🤪mic growth.
The Jakarta Post quoted Finance Minister Sri Mulyani Indrawatiassaying that the plan will be incorporated in a tax bill currently beingdiscussed by the government before it is brought to the House ofRepresentatives. The bill, containing taxation provisions and facilities tostrengthen the economy, would amend the current Income Tax (PPh) Law,Value Added Tax (PPN) Law and the General Taxation System (KUP) Law.It would complement other policies aimed at removing barriers toinvestment and trade. Speaking to the press on September 3, the minister said thecurrent rate of 25 percent will be trimmed to 20 percent, adding that thecountry willstart lowering the tax in 2021. The former World Bank managing director said President Joko Widodoand Vice President Jusuf Kalla had given directions to ensure the cut would notput pressure on the state budget and would stimulate the economy. Indonesia’s economy grew only 5.05 percent in the second quarter,its slowest pace in the last two years, amid softening investment and fallingexports. The government is also mulling charging publicly listed companiesa much lower income tax, Sri Mulyani said. The rate could be 17 percent, especially for companies that arenew at the bourse so they can get a 3 percent lower rate for a period offive years, she added. Finance Ministry Taxation Director General Robert Pakpahanestimated there would be a 87 trillion Rp (6.11 billion USD) loss in staterevenue if the corporate income tax is cut to 20 percent in 2021, when the newtax rate is expected to be enforced. However, if the tax rate is cut to 22 percent in 2021 before beinglowered again in 2023 to 20 percent, he expected the measure to only incura 52 trillion Rp loss in taxation revenue during the two-yearperiod.-VNA
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Indonesian Finance Minister Sri Mulyani Indrawati (right). (Source: Antara) 
