New capital market taxation system needs clarification
New capital market taxation system needs clarification
JAKARTA (JP): The president of the Jakarta Stock Exchange (JSX), Hasan Zein Mahmud, said yesterday that the definition of shares owned by founders under the new capital market taxation system still needs clarification.
"The difference in the perception of shares owned by founders could hamper the enforcement of the new tax regulation," he said in response to the introduction of the new capital market tax.
Hasan said there should be clearer guidelines about the definition of the shares owned by founders, which do not only consists of old shares but also rights and bonus shares.
The government last week issued 29 regulations to support the implementation of the new tax laws, including a ruling on the introduction of the new capital market tax.
Under the new capital tax regulation, the tax rate is set at 0.1 percent of the gross transaction value, except for the sales of shares owned by founders, which are then subjected to an additional five percent.
The value of shares mostly increase by four to seven times after the initial public offering.
The capital market tax was previously based on capital gains, with rates of 15 percent for gains of up to Rp 10 million, 25 percent for those above Rp 15 million to Rp 50 million and 35 percent for those above Rp 50 million.
Hasan described the new tax law, except for the lack of clearer guidelines on terms of old shares, as not only being more practical but also more acceptable than the previous one.
Benefit
"The new tax gives founders far more benefit despite the higher rate," he told The Jakarta Post of the positive impact of the new tax system.
He said that the 0.1 percent rate for the sales of shares owned by the investing public is also quite reasonable even though it will also be imposed on transactions made at a loss.
All transactions, either profitable or otherwise, are subject to tax under the new system.
M. Nababan, an official of the representative office of the Surabaya Stock Exchange (SSE), said that the East Java-based market will also immediately enforce the new tax system.
He said the new tax, which will be also imposed on transactions made at a loss, is also expected to discourage "speculative" trading.
"We hope that investors will no longer carry out cut loss trading," he said of the benefit of the new capital market tax.
Tito Sulistio, president of the Over-the-Counter market, said earlier that the introduction of the new tax system would also serve as an important facilitator of stock trading activities this year.
Monthly transactions reach more than Rp 2.5 trillion (US$.16 billion) on the JSX and Rp 6 billion ($2.8 million) on the SSE. (hen).