September 27, 2016 edition
There is another week to go before the first 3month phase of the tax amnesty program ends. Although last week's preliminary results of repatriated funds from Indonesian tax payers' bank accounts, amounting to Rp75.3 trillion, remain disappointing and far below the Rp1 quadrillion target, there is an encouraging sign that government tax revenues, which are now at Rp33.5 trillion, are rising fast. Tax revenues under the program are derived from a tax rate multiplied against the current Rp1.395 quadrillion worth of undisclosed wealth held, both overseas and at home. In fact, the portion of undisclosed wealth reported locally, at Rp935 trillion, is surprisingly more than double the Rp385 trillion wealth kept abroad.
The longheld view is that wealthy Indonesians keep a large portion of their funds overseas. This is why one of the main objectives of the tax amnesty program is to give enough incentives to bring these funds back home. The sweetener was the promise from the tax office not to investigate the source of income used to acquire these undisclosed wealth, in return for paying an attractive single digit tax rate on the disclosure of unreported wealth, both at home and abroad. But there is some flexibility built in for overseas funds, but the tax rate applied for those wanting to keep these funds abroad is higher than the rate for those willing to repatriate these funds.
Read More
More Economy articles in other editions
September 20, 2016 edition
When the economy is in a prolonged slump, only the central bank can move the market. So once again, markets will keep their eyes glued on the US and Japanese central banks. On September 20-21, both the Bank of Japan (BoJ) and the US Federal Reserve (Fed), will convene and, no doubt, this will raise the pace of investors' pulse.
The outcome of these two meetings, on opposing sides of the globe, will determine the fate of world markets. The announcement from Japan, due to its earlier time zone, will be the first to move markets. Half a day later, all eyes and ears will be on Janet Yellen, head of the US Fed. There are also two central issues. In Japan, investors will see whether the quantitative easing (QE), wherein the central bank prints money to buy government and corporate bonds, will continue. While in the US, once again, the speculations of a Fed rate hike will be the main focus.
Read More
September 13, 2016 edition
September 6, 2016 edition
August 30, 2016 edition
At his home in Kampung Rawa, Jakarta, Hairiah has a business that supplements his income as an optician: He sells basic commodities at Elektronik Warung Gotong Royong (e-Warong), a 'store' complete with ATMs to serve the disbursement of social assistance funds.
As a result, Johar Baru residents are able to obtain welfare assistance for rice, sugar, cooking oil and wheat flour with just a swipe of the Family Welfare Card (KKS). With an electronic data capture (EDC) equipment from Bank Negara Indonesia (BNI), Hairiah can also serve KKS holders who want to pay electricity, telephone, or water billseven loan installments. "They come in, swipe their cards and bring home the goods," Hairiah said last Tuesday.
Read More
August 23, 2016 edition
August 9, 2016 edition