On Tuesday (26/12), Omnibus Law has been planned to be the new invention that would bring fresh air for the capital market investors that will flourish the index performance of Indonesia’s JCI in 2020. Omnibus Law itself is a law that converts or do the revision and repeal all the law outright.
The tax omnibus law is currently being drafted by Finance Minister Sri Mulyani Indrawati and her team of experts. Sri Mulyani had said that the tax omnibus law covers simplification, economic zones, and research and development. One of the policy that will be affected is the corporate tax, which will be reduced from 25 percent to 20 percent gradually until 2023. Mainly focused on those earning the foreign dividend income will be tax-free in one condition that its dividend should be invested back in Indonesia. Moreover, two laws, which are Law in Job Creation and Micro Small-Medium Business, will be merged to one
Poltak Hotradero, Senior Analyst of Indonesia Stock Exchange stated the series of omnibus law plans will be discussed with the Parliament this January, and if implemented promptly, it may improve Indonesia’s competitiveness in investment and investment flows. As depicted by the market, the foreign investors had given an increment on the number of transactions in the capital market to Rp43.69 trillion. From January until Wednesday (25/12), JCI has risen 1,8% towards the 6,305.91 level.
The Taxation Omnibus Law will conform the 7 laws (UU) and 28 articles that consist of law on income tax (PPh), law on value-added tax or PPn, law on general provisions and tax procedures (KUP), law on customs, law on excise, law on regional taxes and regional retribution, and law on regional governments.
Sources: CNN Indonesia Tempo
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