Tax & Business
From The Report: Indonesia 2018
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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.

Articles from this Chapter

Overview

Evolving environment: A high-level breakdown of new tax regulations in 2017
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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 STATE: The government has set the tax revenue target for 2017 at Rp1472.7trn ($111bn), and the country…

Analysis

Stepping it up: Building manufacturing capacity with additional industrial zones
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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 has lagged behind that of regional competitors, as has overall economic development since the 1997-98…

Viewpoint

Growth targets: Ay Tjhing Phan, Tax Leader, PwC, on increasing the tax base, ensuring compliance and raising tax revenues
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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). Following up on this success the government now wants to improve compliance by auditing taxpayers…