Indonesia has posted positive economic growth in the last few years, even in the face of the recent global economic slowdown. The country recorded a GDP growth rate of 5% in 2016, on par with the previous two years. Tax income is a key component to this growth, allowing the state to invest in various sectors of the economy and contribute to...
This chapter examines Indonesia’s tax regime, focusing on its recently completed tax amnesty programme, new zone-based concessions established to attract investors, digitalisation of tax administration and other key areas.
It also contains a viewpoint from Ay Tjhing Phan, Tax Leader, PwC.
With investment in industrial zones, SEZs, infrastructure and priority industries set to increase in the coming years, Indonesia remains extremely well positioned to capitalise on its position as a regional leader.
The Indonesian government has set a target tax-to-GDP ratio of 16% by 2019, up from the current average of 12-13%. While ambitious, the goal is not unattainable given that neighbouring countries Vietnam, Malaysia and Thailand have tax-to-GDP ratios averaging of 13% and 17%. However, the target can only be reached by widening and stabilising...
In order to finance Indonesia’s development, the government aims to achieve a 16% tax-to-GDP ratio by 2019. Armed with a five-year plan, the Directorate General of Taxation (DGT) faces a challenging, but not impossible, task in reaching this aspiration. Indonesia’s tax system is largely based on self-assessment, and despite the DGT’s efforts...
This chapter examines Indonesia’s tax regime, focusing on a newly improved amnesty facility, income tax breaks available for pioneer industries, a new effort to improve data collection and processing, and the reduction of luxury goods tax for certain products.
It also contains a viewpoint from Ay-Tjhing Phan, Tax Leader, PwC Indonesia.
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