Govt delays tax hike on stock

Govt delays tax hike on stock

The Jakarta Post, Jakarta

The government has decided to postpone a controversial plan to
raise the tax rate on stock transactions as deliberations on a
revised tax law have yet to be completed, an official has said.

Syarifuddin Alsyah, a member of the tax reform team for the
Directorate General of Taxation, told The Jakarta Post recently
that the directorate would not raise tax rates, including those
for stock transaction, for this year.

"We have postponed the plan to raise tax rates for stock
transactions this year as they have to be based on the upcoming
new tax law, which I believe will not be concluded this year due
to the general election," said Syarifuddin.

He explained that the delay in deliberating the draft of the
revised tax laws was caused by objections voiced by some state
institutions on several controversial articles. Among the
institutions are the Ministry of Trade and Industry, and the
central bank.

Syarifuddin refused to disclose the disputed articles.

The Directorate General of Taxation previously said it would
raise income tax for share transactions to 0.3 percent from the
current 0.1 percent by the end of this year, in order help boost
state revenue from taxes.

Analysts, however, said the delay in the decision was not
merely caused by the delay in revising the tax law, but due more
to attempts by the current government under President Megawati
Soekarnoputri to seek financial support from the capital market
community for the upcoming presidential election runoff in
September.

Syarifuddin dismissed the accusation, saying the delay was due
solely to the lack of a legal basis.