Forex - Indonesia Flows: USD/IDR supported above 13180; cutting tax rate to make companies comply

Published at 03:41 (GMT) 26 May

   

The government is studying whether to reduce next year the corporate income tax to as low as 17.5 percent from 25 percent now, the president's chief of staff said on Monday, in a move that would push companies to comply with tax payments. Finance Minister Bambang Brodjonegoro confirmed Luhut's statements in trying to reduce the corporate tax rate. He was quoted by Bisnis Indonesia on Monday as saying that the government will put that option in the government's agenda to revise the 2009 Income Tax Law next year. The minister said the move was being aimed at reducing the corporate income tax in a bid to increase tax compliance. According to government data, 5 million corporate taxpayers are registed, but only 10 percent of them regularly submit their annual tax reports (SPT). Still, the Finance Ministry has been criticized for setting up tax revenue target as "too ambitious". According to the revised 2015 State Budget, total revenue is targeted at Rp 1,762 trillion ($136 billion) and tax revenue - including from excise and duties - is projected to amount to Rp 1,489 trillion, or 85 percent of the total.This year's target suggests that the tax office must increase taxation revenue by 30 percent from the 2014 collection (Jakarta Globe).

On FX, USD/IDR trading between 13180 - 13200 lvls so far today. Unlikley to see any major moves and pair may continue to consolidate through the session. Gaining 0.8%, JKSE spiked towards 5340.00 lvls shortly after the open. BB