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Ada Pertanyaan? Hubungi Kami Ari Pramuditya
Minister of Finance Bambang Brodjonegoro. Photo by: RES
In the wake of a series of Economic Policy Packages designed as concrete steps able to reform the economy amid the current global downturn, the government announced a fifth new economic-policy package on Thursday, 22 October 2015. As reported on the official website of the Cabinet Secretariat (Setkab.go.id), the President of the Republic of Indonesia, Joko Widodo, along with Vice President Jusuf Kalla, held a meeting in the Presidential office in Jakarta relating to the new package.
Pramono Anung, as the Cabinet Secretary, stated after the meeting that the fifth economic package primarily related to asset revaluation and the removal of double taxation. Moreover, the new package is expected to boost economic growth and provides evidence that the government is seriously committed to opening up new job opportunities in the country.
Indeed, Mr. Anung emphasized that, as far as the government was concerned, any economic and industrial growth would be meaningless in the absence of any major new job opportunities for the people. The government is thus committed to making employment one of its main priorities.
Mr. Anung further stated that he was unsure as to when the economic policy package would expire. However, he stressed that there would be more economic-policy packages to follow and that the government would continue its policy of deregulation.
“Maybe the Coordinating Minister for the Economy will become Mr. Deregulation,” Anung joked.
Indonesia’s Minister of Finance, Bambang Brodjonegoro, stated after the meeting that the fifth economic-policy package consisted of taxation facilities relating to income tax (Pajak Penghasilan) and intended for the purposes of asset revaluation. Such facilities are to be implemented in form of income-tax tariff-revaluation deductions for corporations.
Minister Brodjonegoro also stated that businessmen who were engaged in bookkeeping activities could also be eligible for revaluation. Moreover, the special rate for the final revaluation amount has been lowered from 10% to 3% for revaluation applications which are submitted before 31 December, 2015.
If a revaluation application is submitted during the period that runs from 1 January 2016 until 30 June 2016, then the revaluation rate will be 4%. After that, the rate will become more expensive if a proposal is filed later that the above-mentioned dates. However, it will still remain below the previous rate of 10%. Specifically, if a revaluation proposal is filed between 1 July 2016 and 1 December 2016, then the final income-tax revaluation amount will be set at 6%.
Minister Brodjonegoro also stated that one factor that will make the revaluation process easier is that most of the assets to be revalued consisted of land. For example, the Logistical Affairs Board (Bulog) warehouse on Jl. Gatot Subroto in Jakarta will be subject to such a reevaluation. The building has been in use since the 1970s.
Minister Brodjonegoro believes that the value of this Bulog warehouse has probably increased a hundredfold over its 1970 price. Bulog warehouses, post offices and the like are scattered widely across the country, and the value of these assets will increase automatically.
Double Taxation
Also scheduled as part of the new economic-policy package is a Ministry of Finance regulation pertaining to the removal of double taxation for financial instruments in the form of collective investment contracts (Kontrak Investasi Kolektif – “KIK”) and real-estate investment funds (Dana Investasi Real Estate – “DIRE”). Bambang said that the Ministry of Finance regulation would be issued next week and would ensure that any double taxation would be removed.
“Single taxation is adequate. There will be no more double taxation for income-tax purposes, as KIK and DIRE are inseparable from each other. Sales of assets including lands and buildings will not now be subject to Article 4(2) as it relates to Income Tax. Moreover, preliminary returns will be made if an excess of income tax has been paid,” said Bambang.
This facility is expected to affect KIK/DIRE instruments, as well as real-estate investment trusts (REIT). Consequently, it should be possible for Indonesia to attract REIT, many of which have been set up by Indonesian companies overseas, back into the country.
(sp)
Ari Pramuditya
Minister of Finance Bambang Brodjonegoro. Photo by: RES
In the wake of a series of Economic Policy Packages designed as concrete steps able to reform the economy amid the current global downturn, the government announced a fifth new economic-policy package on Thursday, 22 October 2015. As reported on the official website of the Cabinet Secretariat (Setkab.go.id), the President of the Republic of Indonesia, Joko Widodo, along with Vice President Jusuf Kalla, held a meeting in the Presidential office in Jakarta relating to the new package.
Pramono Anung, as the Cabinet Secretary, stated after the meeting that the fifth economic package primarily related to asset revaluation and the removal of double taxation. Moreover, the new package is expected to boost economic growth and provides evidence that the government is seriously committed to opening up new job opportunities in the country.
Indeed, Mr. Anung emphasized that, as far as the government was concerned, any economic and industrial growth would be meaningless in the absence of any major new job opportunities for the people. The government is thus committed to making employment one of its main priorities.
Mr. Anung further stated that he was unsure as to when the economic policy package would expire. However, he stressed that there would be more economic-policy packages to follow and that the government would continue its policy of deregulation.
“Maybe the Coordinating Minister for the Economy will become Mr. Deregulation,” Anung joked.
Indonesia’s Minister of Finance, Bambang Brodjonegoro, stated after the meeting that the fifth economic-policy package consisted of taxation facilities relating to income tax (Pajak Penghasilan) and intended for the purposes of asset revaluation. Such facilities are to be implemented in form of income-tax tariff-revaluation deductions for corporations.
Minister Brodjonegoro also stated that businessmen who were engaged in bookkeeping activities could also be eligible for revaluation. Moreover, the special rate for the final revaluation amount has been lowered from 10% to 3% for revaluation applications which are submitted before 31 December, 2015.
If a revaluation application is submitted during the period that runs from 1 January 2016 until 30 June 2016, then the revaluation rate will be 4%. After that, the rate will become more expensive if a proposal is filed later that the above-mentioned dates. However, it will still remain below the previous rate of 10%. Specifically, if a revaluation proposal is filed between 1 July 2016 and 1 December 2016, then the final income-tax revaluation amount will be set at 6%.
Minister Brodjonegoro also stated that one factor that will make the revaluation process easier is that most of the assets to be revalued consisted of land. For example, the Logistical Affairs Board (Bulog) warehouse on Jl. Gatot Subroto in Jakarta will be subject to such a reevaluation. The building has been in use since the 1970s.
Minister Brodjonegoro believes that the value of this Bulog warehouse has probably increased a hundredfold over its 1970 price. Bulog warehouses, post offices and the like are scattered widely across the country, and the value of these assets will increase automatically.
Double Taxation
Also scheduled as part of the new economic-policy package is a Ministry of Finance regulation pertaining to the removal of double taxation for financial instruments in the form of collective investment contracts (Kontrak Investasi Kolektif – “KIK”) and real-estate investment funds (Dana Investasi Real Estate – “DIRE”). Bambang said that the Ministry of Finance regulation would be issued next week and would ensure that any double taxation would be removed.
“Single taxation is adequate. There will be no more double taxation for income-tax purposes, as KIK and DIRE are inseparable from each other. Sales of assets including lands and buildings will not now be subject to Article 4(2) as it relates to Income Tax. Moreover, preliminary returns will be made if an excess of income tax has been paid,” said Bambang.
This facility is expected to affect KIK/DIRE instruments, as well as real-estate investment trusts (REIT). Consequently, it should be possible for Indonesia to attract REIT, many of which have been set up by Indonesian companies overseas, back into the country.
(sp)