Thursday, December 28, 2017

Coordinating Minister for the Economy's Response on US Tax Reforms

United States Senate (US) approved the Bill (Bill) Tax proposed by President Donald Trump. One of them cut the rate of Income Tax (PPh) Agency from 35 percent to 21 percent.

"We do not yet know what other country's reaction to the US tax reduction," said Coordinating Minister for Economic Affairs, Darmin Nasution, when met at his office, Jakarta, Friday (22/12/2017).

He argues, the reform of the tax system in the US will encourage the perception of economic investors Uncle Sam's country will move better.


"Then it's a flight to quality (reallocate to safer assets), but how much, we can not predict because the impact will follow if their economy improves," said Darmin.

If the US economy improves, he continued, will hoist exports of a number of countries that rely on US markets, including Indonesia. However, Darmin estimates that there will be potential for foreign capital outflow from Indonesia over US tax policy.

"From the beginning there will be influence, live each country what the reaction," said Darmin. If in other countries busy to cut the tax rate of his body like Trump, then Darmin worried about the potential for tariff war. "If other countries lower, there will be competition," he said.

However, when asked about the possibility of Indonesia participate in reducing the rate of corporate income tax from the current 25 percent, previously there is a discourse to cut the tax to 17 percent.
"We do not want to, do not want to comment, just look at the development," he said.


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