Tuesday, 26 June 2018 04:06

Indonesia won’t impose tax for foreign funds anytime soon: BI

Tue, June 12, 2018 | The central bank has said the country will not impose a tax on foreign funds anytime soon, stressing that the issue is only being discussed and is an option to control both capital inflows and outflows.

Bank Indonesia (BI) Governor Perry Warjiyo said in Jakarta over the weekend that the central bank had no plan to use such an instrument.

“There was a misunderstanding [regarding my previous statement]. I only gave an example that one of the instruments [to control foreign funds] is a tax,” he said as quoted by kotan.co.id.

“It is only an example of an instrument that could be applied. But it is not an initiative or a plan to be implemented anytime soon.” 

Imposing taxes can prevent both huge inflows and outflows of foreign funds. The objective is to stabilize the currency exchange rate and calm the financial market down.

Meanwhile, Coordinating Economic Minister Darmin Nasution called on all parties not to make a fuss about Perry’s statement because even if such an instrument is implemented, BI should discuss it with the government.

“Don’t comment further on it. The situation has yet to calm down,” he said.

Similar comments were made by the Finance Ministry’s head of fiscal policy Suahasil Nazara, stressing that the ministry had never discussed the issue. “I just heard [about] it. There is no talk about it,” he said. (bbn)

Source: http://www.thejakartapost.com/news/2018/06/11/indonesia-wont-impose-tax-for-foreign-funds-anytime-soon-bi.html

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