BAPEPAM seeks to end double taxation<\/p>\n
JAKARTA (JP): The liberalization of foreign ownership of
\nmutual funds shows the Indonesian government's commitment to
\ndeveloping investment funds, in an effort to enlarge the
\ndomestic-investor base.<\/p>\n
The chairman of the Indonesian Capital Market Supervisory
\nAgency (BAPEPAM), I Putu Gede Ary Suta, told reporters here
\nyesterday that besides allowing foreign ownership of 100 percent
\nof a mutual fund, the agency will also try to abolish double
\ntaxation in the stock market which may hinder the growth of the
\nfunds.<\/p>\n
Putu said an investor in the local stock market has to pay
\nincome tax on both capital gains and dividends. If a mutual fund
\nbuys or sell shares, the capital gains go to the fund not to the
\ninvestors. They should not pay such income tax twice, he
\nbelieved.<\/p>\n
Putu said that a mutual fund will help retail investors who
\nare not familiar with research reports by analysts. \"Investing
\nthrough mutual funds promises a better return than time
\ndeposits,\" Putu asserted.<\/p>\n
Putu said that mutual funds potentially offer a good return
\nbecause they are allowed to invest in stocks as well as financial
\ninstruments.<\/p>\n
\"However, they are not allowed to buy shares of a foreign
\npublic company or to invest in an overseas money market,\" Putu
\nsaid.<\/p>\n
He added that the government has yet to decide whether a
\nmutual fund can invest in an overseas money market.<\/p>\n
\"We are still working on it. So, please, wait and see,\" he
\nsaid.<\/p>\n
A director of PT Mashill Securities, Isaka Yoga, noted that
\ninitially it might not be easy for a fund manager to sell the
\nshares of a mutual fund to local investors.<\/p>\n
Yoga said that most of Indonesian investors are short-term
\noriented, while an open-ended fund, which is required to buy back
\nits shares when the investors return the shares, need long-term
\noriented investors.<\/p>\n
Citing an example, he said that when PT BDNI Reksadana (mutual
\nfund) was listed on the stock exchange last year, its share price
\ncould not go up because of selling pressures on the first trading
\nday.<\/p>\n
Putu said that the regulation which allows 85-percent foreign
\nownership of a publicly-listed securities company is intended to
\nprovide equal treatment because foreign institutions have been
\nallowed to own a maximum of 85 percent of the shares of a
\nsecurities company through direct investment. (08)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bapepam-seeks-to-end-double-taxation-1447893297",
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"sponsor": "Okusi Associates",
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