Govt hikes income tax on bonds to 20%<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government has raised the income tax rate on bond trading
\nto 20 percent from 15 percent, but scrapped another controversial
\ntax regulation on bond trading after only one year.<\/p>\n
Capital gains on bond trading will no longer be taxed at 0.03
\nper cent, following widespread criticism that the measure smacked
\nof double taxing.<\/p>\n
The revised ruling is one of six new regulations, including on
\nthe taxation of income from renting properties, on goods subject
\nto luxury sales tax, and taxation payments for retail business
\nowners.<\/p>\n
"Raising the final income tax rate from 15 percent to 20
\npercent would equal the income tax rate imposed on earnings from
\nterm deposits and Bank Indonesia's certificate rates," a
\nstatement from the Directorate-General for Taxation said on
\nThursday.<\/p>\n
It said government regulation No. 6\/2002 on income tax from
\nbonds would help promote trading on Indonesia's only bond market,
\nthe Surabaya Stock Exchange (SSX).<\/p>\n
Last year many suspected bond trading at the SSX declined due
\nin part to confusion over the old tax ruling. This led investors
\nto trade outside the SSX.<\/p>\n
The new ruling applies on bond trading at the bourse only.
\nUnlike shares, bonds do not bear the names of their owners, so it
\nis not necessary trade at a bourse.<\/p>\n
Critics said the 0.03 percent capital gains tax should have
\nbeen absorbed by the 15 percent income tax rate.<\/p>\n
Income tax rates from bond trading outside the bourse were not
\nfinal, and thus remain subject to further income tax rates, the
\nstatement said. The ruling is valid as of May 1, 2002.<\/p>\n
For the income tax on earning made from renting properties,
\nthe rate has been raised to 10 percent from six percent. The
\nruling is also effective as of May 1, 2002.<\/p>\n
Owners of retail businesses will now have to pay twice as much
\nthan before in income tax from their monthly sale.<\/p>\n
The Finance Minister Decree No 84\/2002 raises the monthly
\nincome tax payments to 2 percent from 1 percent for individuals
\nin the retail sector owning more than one outlet.<\/p>\n
On luxury sales tax, government regulation No 7\/2002 exempted
\nseveral items from a list of luxury goods.<\/p>\n
The items were no longer considered as luxury goods, the
\nstatement said, citing as the only example several types of
\nrugs. The regulation is effective as of May 1, 2002.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-hikes-income-tax-on-bonds-to-20-1447893297",
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