The Indonesian government has announced plans to introduce corporate tax cuts to attract more foreign investments.
Currently, the tax rate for corporate entities is set at twenty-five percent (25%). Starting in 2021, the government will be introducing gradual corporate tax cuts, with the first stage lowering the tax rate to twenty percent (20%).
To further boost the appeal of the country to foreign investors, the government is also planning to introduce a lower tax on share listing, at seventeen percent (17%).
The main goal behind these tax cuts is to divert foreign investors from neighboring competitors Thailand and Vietnam, and grab the attention of big corporations looking to move away from China.
Corporate tax cuts to further boost Indonesia’s growth
Indonesia is currently going through a very inspiring shift in its economy and governance. The country is attracting more foreign investments, and the government is introducing innovative policies to solidify its position as a leader in Asia.
Recently, government officials announced a larger budget focusing on boosting the educational system, which should lead to a better-equipped workforce in the near future.
While the economic growth in the country has fallen to a little over five percent (5.05%), President Widodo has assured that the new tax cuts will attract more foreign investments and an overall boost to the economy.
Economists and business representatives have been waiting for the corporate tax cuts for several years now, and according to some, these changes will have an immediate impact on the country’s development.
Indonesia is becoming one of the biggest hubs for foreign investment and relocation in Asia, and such forward-thinking policies on the part of the government are surely going to secure the country’s place among the top economies in the region.
