No more tax relief for foreign-funded projects<\/p>\n
JAKARTA (JP): In a government attempt to support locally-
\nfunded projects, all contractors, suppliers and consultants
\ninvolved in government projects financed by foreign loans will no
\nlonger be exempt from income tax.<\/p>\n
A presidential decree was issued last month to implement the
\nnewly amended tax law, Tax Director General Fuad Bawazier said
\nyesterday, and will apply to all contracts signed as of April
\nthis year.<\/p>\n
The presidential decree was one of a series of regulations
\nissued over the past few weeks to implement the new tax laws
\nwhich were enforced early this year to replace the old ones
\nenacted in 1983.<\/p>\n
Fuad said that the new tax policy is expected to raise
\nadditional tax revenues of at least Rp 200 billion (US$93
\nmillion) in the coming fiscal year.<\/p>\n
\"We expect to collect around Rp 200 billion in income tax on
\nthe 11 trillion rupiah's worth of foreign-funded projects
\nscheduled for the 1995-96 fiscal year,\" Fuad told reporters,
\nadding that the new tax measure would not affect other taxes and
\nlevies.<\/p>\n
\"Other than income tax, all tax obligations for foreign-funded
\nprojects are still borne by the government,\" he said.
\n\"Contractors, suppliers and consultants are still exempt from
\nimport duties, surcharge tax, value added tax and sales tax for
\nluxurious goods related to foreign-funded government projects.\"<\/p>\n
The government, at present, exempts contractors, suppliers and
\nconsultants involved in foreign-funded projects from the above
\ntax obligations so that all portions of the loans can be put
\ntoward project development.<\/p>\n
As for the reasons behind the change, Fuad explained that the
\nmajority of contractors, suppliers and consultants taking part in
\ngovernment-funded projects are now profitable and less in need of
\nincome tax relief.<\/p>\n
\"Therefore, it will be fairer if the income tax relief is
\nabolished,\" he said, adding that the new tax treatment is fully
\nin line with the one applied to those undertaking locally-funded
\nprojects.<\/p>\n
Tax returns<\/p>\n
The tax director general yesterday reminded taxpayers that
\nincome tax returns for 1994 should be submitted to tax offices by
\nthe end of this month and that all returns will still be based on
\nold income tax rates.<\/p>\n
The new income tax law, effective as from January, reduces the
\nincome tax to 10 percent from 15 percent for the lowest income
\nbracket, to 15 percent from 25 percent for the middle income
\nbracket and to 30 percent from 35 percent for those in the
\nhighest income segment.(hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/no-more-tax-relief-for-foreign-funded-projects-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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