Tax incentive for banks

Tax incentive for banks

JAKARTA (JP): Funds accumulated by banks and leasing companies
for the provision of bad debts or unpaid claims are now tax
deductible, the Ministry of Finance announced yesterday.

According to the Finance Minister's Decree No: 80/KMK.04/1995
issued yesterday, the deductible contingency reserve is three
percent of the productive assets for banks, while that for
leasing firms is 2.5 percent of the average value of contracts.

The ruling also gives a similar tax treatment to insurance and
mining companies but the amount of deductible expenses is
calculated under different parameters. (hen)