Viewpoint: Sharly Rungkat Indonesia is currently at a pivotal juncture in terms of the development of both hard and soft infrastructure, which coincides with unprecedented positive consumer sentiment towards digital technologies. According to PwC’s “Global Entertainment and Media Outlook 2018-22” report, the number of mobile internet subscribers in Indonesia is set to grow from 103m in 2018…
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 the continued building of infrastructure. CURRENT…
Special economic zones (SEZs) – known locally as Kawasan Ekonomi Khusus (KEK) – are the flagship industrial development programme of the government of Indonesia. The country is targeting 7% annual GDP growth through to 2019, and aims to reach upper-middle-income status by that year. One key factor in achieving this goal is accelerating the industrial sector. Domestic manufacturing growth…
Viewpoint: Ay Tjhing Phan The government has aimed to enhance compliance of taxpayers and to expand the tax base in an effort to raise revenues. In 2017 the government’s successful tax amnesty programme ended, yielding the reporting of Rp4881trn ($368bn) worth of previously undisclosed assets, redemption money payments amounting to Rp114trn ($8.6bn) and other tax revenue valued at Rp21trn ($1.6bn).…
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.…
Although Indonesia faces a challenging external environment, including the threat of US protectionist trade policies and concerns over contracting exports to China, its strong macroeconomic fundamentals should keep GDP growth steady, with this forecast to continue accelerating in 2017. With commodities prices rising in 2017 – and with domestic demand supported by credit growth, steady FDI inflow
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 Indonesia’s narrow tax net. Facilitating Compliance An…
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 to widen the tax net, the current level of tax compliance…
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.…
Although Chinese and global demand, low commodity prices and rising wages will continue to challenge trade growth in 2016, Indonesia remains on a positive trajectory. Rising domestic demand, increasing liberalisation measures, improvements to the investment climate and a shift towards value-added production will bolster both exports and investment. At the same time, new trade agreements with the w