Indonesia’s Prabowo considers corporate tax cut, report says
6:14 am Sunday, October 13th, 2024
JAKARTA (Reuters) – Indonesia’s incoming president, Prabowo Subianto, will review the possibility of cutting the corporate income tax to 20% from 22%, CNBC Indonesia reported on Sunday, citing an adviser.
Prabowo, who takes office on Oct. 20, has pledged to improve tax compliance, seeking to boost tax revenue to 18% of gross domestic product. His team has said Prabowo plans to spin off the finance ministry’s tax and custom offices to create a state revenue agency.
“We do hope that at some point we can reduce corporate income tax,” CNBC Indonesia quoted Prabowo adviser Dradjad Wibowo as saying.
Dradjad could not be immediately reached for comment on Sunday.
Foreign investors have been worried that Prabowo, who plans to expand the number of government ministries, may ease fiscal discipline in Southeast Asia’s largest economy. A senior aide has said Prabowo will stick to agreed 2025 spending levels and adhere to existing budget rules.
The decision on a corporate tax cut will depend on government revenue conditions, Dradjad was quoted as saying.
“We will see how the state revenue performance is, if there is an opportunity for it, we want to reduce it so that it is not too burdensome for the people.”
(Reporting by Fransiska Nangoy in Jakarta; Editing by William Mallard)
