The Indonesian government is in the midst of pursuing an ambitious new growth strategy, emphasizing investment over domestic consumption as a primary growth driver in the wake of depressed commodity prices, lagging household consumption and lower-than-anticipated government revenues.
Last month the Indonesian government began the implementation of a tax amnesty to boost state revenue and investment, and ease pressure on the nation’s current account.
With the new government having successfully reduced fuel subsidies and revised the national budget for FY 2015, the external focus is now expected to shift to the implementation of its plans for infrastructure development. That focus will likely be on the disbursement of additional funds for infrastructure spending and the efforts of the administration to leverage...
The Indonesian tax system is based on three primary laws: the General Tax Provisions and Procedures ( Ketentuan Umum dan Tata Cara Perpajakan, KUP) Law, the Income Tax Law, and the Value-Added Tax (VAT) and Luxury Sales Tax (LST) Law. These laws are routinely amended in order to accommodate the country’s rapidly changing business environment, as well as to support the...
This chapter examines Indonesia’s tax environment, focusing on changes to the tax system and regulations for potential investors. It also contains a viewpoint from Ay Tjhing Phan, Tax Leader, PwC.
Indonesia is transforming from a resources- and consumption-based economy to a more manufacturing- and investment-oriented one, working to build an industrial base that will allow it to reduce its dependence on imports and keep more value within the economy. Following his inauguration in October 2014, President Joko Widodo quickly took a number of vital and positive steps that so far are increasing opportunities for foreign direct investment.
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