Ten more tax rulings announced
Ten more tax rulings announced
JAKARTA (JP): The government announced on Saturday another 10 regulations that will support the implementation of the newly- amended tax laws.
The regulations cover the tax treatment of venture capital, the abolition of value-added tax on the sale of low-cost houses and the deductible reserves in banks and insurance companies.
Guidelines on the collection of income tax on share transactions and the classification of fixed assets are also regulated in the new rulings, which are part of 38 regulations issued to support the implementation of the new tax laws.
Tax Director General Fuad Bawazier said that the tax on the sale or divestment of a venture capital company's shares in start-up firms is set at 0.1 percent of the gross transaction value.
The tax rate of 0.1 percent imposed on the sale or divestment of a venture capital firm's shares is not all that significant as compared to the 5.1 percent tax on transactions involving founders' shares in publicly-listed companies.
"It is one of the government's incentives for the operation of venture capital companies in the country," Fuad said of the low tax rate imposed on the transactions involving venture capital firms' shares.
Raising the number of venture capital companies is one of development priorities set by the government to help the financing of small-scale companies, which often face difficulties in raising investment funds from banks.
The new tax regulations also include the abolition of value- added tax on the sale of houses smaller than 70 square meters as well as student dormitories.
Share transaction
Other important aspects of the new regulations include the issuance of guidelines on the collection of tax on stock exchange transactions.
The tax rate is 0.1 percent of the gross transaction value on the sale of shares owned by the investing public and 5.1 percent on the sale of shares owned by founders.
Fuad explained that founders' shares are shares which were bought by founders before the listing of their company on the stock market at a price level of less than 90 percent of the price set during the initial public offering.
The tax is collected by the stock exchange operator through existing brokerage companies and is paid monthly to appointed banks.
The tax regulations issued on Saturday also include the tax director general's circular letter supporting Bank Indonesia's ruling which requires taxpayers to include their tax returns and balance sheets when making loan application.
The requirement is imposed on applications for loans of Rp 30 million (around $14,000) and above.
"I really support the central bank's policy," Fuad said, adding that the central bank's move is essential to encourage business transparency in the country.
The tax director general acknowledged that taxpayers often manipulate their financial statements to enable them to raise loans much higher than their financial capacity.
"It is not only good for banks but also for the government," he said, adding that the policy would also prevent taxpayers from making false statements in their tax returns, as a low tax payment will disqualify them for all but the smallest loans.(hen)