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Indonesia Must Be Wary of US New Tax Policy
Sabtu, 30 Desember 2017 | 18:02 WIB
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Skalanews - Indonesia should be wary of a new US tax policy that cuts corporate tax rates because it is feared to attract financial funds from a number of developing countries to the superpower.

"Bank Indonesia should be able to formulate the right policy, so as not to hit the real sector that is currently being squeezed," said House Speaker Fadli Zon in a release on Thursday (28/12).

According to him, in addition to the new Tax Reform Act of the United States, rising interest rates by the Federal Reserve (US central bank) is also worthy of serious scrutiny.

Gerindra politicians argue, a number of policies that will affect the Indonesian economy, among others, because both the yield of investment instruments and tax rate cuts offered by President Trump government will be significant in order to lure investors.

"Currently, the value of US corporate profits placed in the global market reaches US $ 2.6 trillion, and if the tax cuts by the Trump Administration could attract up to half of that value, the global market could be shaken," he said.

Moreover, he also argued that the threat of US policy is also expected to strengthen the exchange rate of the dollar.

For that, Fadli also wants the Indonesian government should be smart and should not lose focus related to the national economy.

As proclaimed, Coordinating Minister for Economic Affairs Darmin Nasution said the achievement of a major reform of the United States taxation (US) allows the occurrence of "flight-to-quality" or action investors move capital to a safer place.

"What the US does is make the situation that people will think the economy there is improving, it's called flight-to-quality," Darmin said at the Coordinating Ministry for Economic Affairs, Jakarta, Friday (22/12).

Previously, the US Congress on Wednesday (20/12) local time approved the bill of tax reform proposed by President Donald Trump.

Based on the decision, one of them will be cutting corporate income tax rate (PPh) from 35 percent to 21 percent.

Darmin claimed not to know what the situation will happen after the US tax reform decisions as long as other countries have not given a reaction.

"We also do not know the reaction of many countries, so do not just be considered US policy-makers only, other countries can also. The situation has not been able to read well as long as other countries have not reacted to the US tax reduction," he said.(ant/Frida Astuti)