JAKARTA: Last month the Indonesian government began the implementation of a tax amnesty to boost state revenue and investment, and ease pressure on the nation’s current account.
Under the terms of the amnesty, repatriated assets will enjoy a reduced tax rate ranging from 2% to 10%, depending on how quickly participants sign up to the programme and whether they repatriate just funds or assets as well. This compares to a standard corporate tax rate of 25% and a maximum personal tax rate of 30%.
Repatriated funds must stay within Indonesia for at least three years and be invested via several dozen appointed banks, investment managers and securities companies. Eight permissible investment instruments have been introduced, with a minimum three-year maturity, including government and state-owned enterprise bonds and real estate investment trusts.
