Indonesia to Cut Corporate Tax Rate to Stay Competitive

Indonesia's President Joko Widodo informed that he is considering cutting the corporate tax rate to 17 percent from 25 percent in order to match Singapore's corporate tax rate.

Tax Rate Cut

The government is now discussing the plan to cut the current tariff of 25 percent to 17 percent as part of the efforts to boost taxpayers compliance. The president has informed that the government is trying to figure out whether to cut the corporate tax rate directly or in two stages, cutting to 20 and then to 17 percent.


The president stressed that Indonesia needs to stay competitive. "The thinking is simple. If Singapore's corporate income tax is 17 percent and ours is 25 percent, everybody will go there," Widodo told a tax amnesty roadshow. He added that if other countries can do it, Indonesia can do it too.

Tax Haven 

The president also informed about a plan to establish a tax haven within Indonesia’s territory in order keep the funds of both local and foreign companies seeking offshore business remaining in the country. “We have many islands, create an island for a tax heaven, why not, for example. It is also in the process of all,“ said the President, adding the studies are being conducted by the Government.

Sources: JakartaGlobe, The Insider Stories, Reuters,

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