Initial draft on new tax law completed soon<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government expects to be able to finalize the initial draft
\nof amendments to the tax law by the end of this month. The
\namendment is aimed at simplifying the tax structure and rates in
\nthe country.<\/p>\n
Chief of the Fiscal Analysis Board of the Ministry of Finance
\nAnggito Abimanyu announced on Wednesday that the draft was being
\nstudied by five top universities: the University of Indonesia,
\nGadjah Mada University, Diponegoro University, Airlangga
\nUniversity and Padjadjaran University.<\/p>\n
\"The academic draft is expected to be completed by the end of
\nSeptember 2003,\" he said.<\/p>\n
The amendment of the tax law is part of the government's post-
\nIMF economic reform program. According to the white paper, which
\ndetails the program, after completing the initial draft, the
\ngovernment is expected to complete the final draft in December
\nand submit it to the House of Representatives in January for
\ndeliberation.<\/p>\n
The amendment of the tax law is part of the overall tax reform
\nprogram. The Ministry of Finance is in charge of this program.<\/p>\n
Simplifying the tax structure and rates is expected to help
\nimprove the investment climate by taking into account the rates
\nand structures in neighboring countries.<\/p>\n
Indeed, according to Anggito, the main focus of the amendment
\nof the tax law is corporate tax.<\/p>\n
\"Our focus is on corporate tax because it will help lure
\ninvestment. The impact of every 1 percent cut in corporate tax
\nrates would amount to trillions of rupiah,\" he said.<\/p>\n
He explained that based on research by the aforementioned
\nuniversities, corporate tax rates would be 22 percent, 25 percent
\nand 28 percent.<\/p>\n
The current corporate tax rates are 20 percent, 25 percent and
\n30 percent.<\/p>\n
Anggito said it had been a proposed that luxury sales tax be
\nabolished and replaced with duty.<\/p>\n
Another issue is whether to impose value added tax on coal as
\nlong requested by local coal producers; and whether to exempt
\ncertain strategic commodities from tax.<\/p>\n
\"The benchmark is what is applied in other countries. We don't
\nwant the simplification of the tax structure and rates to cause a
\ndrastic drop in tax revenue,\" Anggito said.<\/p>\n
Elsewhere, Anggito said that the government might not increase
\nexcise on cigarettes in 2004 and 2005 to help protect the
\nindustry.<\/p>\n
According to the white paper on excise revenue policy, the
\ngovernment aims to establish an excise target consistent with the
\ncapability of the cigarette industry.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/initial-draft-on-new-tax-law-completed-soon-1447893297",
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"sponsor": "Okusi Associates",
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