Bank Indonesia Assess savings Exempt Policy. U.S. Dollars in the Local Company From Income Tax

Bank Indonesia Assess savings Exempt Policy. U.S. Dollars in the Local Company From Income Tax

 Bank Indonesia examines the possibility to release U.S. dollar deposits (U.S.) local companies of the income tax in order to encourage them attractive deposit their money abroad. The information was submitted by the Governor of Bank Indonesia, Agus Martowardojo

"We are discussing with the government's initiatives regarding the withdrawal of Indonesian company funds parked abroad," he stated in front of reporters. "One idea proposed is to free [the companies] from taxes, such as in India.".

Currently, the government cites a 20% tax on these funds in domestic banks.

Agus reveal the central bank estimates the Indonesian companies and individuals funds parked in Singapore reached $ 128 billion. Over the years, Bank Indonesia has prompted them to withdraw funds abroad in order to participate stabilize the rupiah.

Since 2012, Bank Indonesia has required the exporter from Indonesia to record revenue from exports in domestic banks after receiving the payment. However, the BI does not require these companies to save income in Indonesia was seen as an attempt to avoid capital controls ..
Last year, the central bank introduced an alternative to the dollar deposits of investors placing funds in dollars abroad.

This year, the rupiah has depreciated by almost 19% following the central bank's concerns about U.S. plans to cut its bond-purchase program in the middle of the current account deficit.

Rupiah dropped to Rp11.800 against the U.S. dollar on Wednesday-the lowest since early 2009.

Bank Danamon chief economist Anton Gunawan said the idea was "worth explored." However, he was not sure such a move could attract large amounts of dollars into the country.

 The reason, many companies and individuals who park money abroad is not just to avoid taxes, but because of political and legal reasons. Amount of money parked abroad as a result of suspected fraud, he said. According to many companies, Singapore became preferred because they offer ease of transactions relating to its status as a financial center in Southeast Asia. (WSJ)