Indonesia to gradually cut corporate tax rate to discourage booking of profits in lower-tax countries like Singapore

JAKARTA (Bloomberg) - Indonesia will gradually cut its corporate tax rate to discourage companies from booking profits in lower-tax countries such as Singapore, the president's top aide said.

The government will cut the rate from 25 per cent currently to "maybe 17.8 or 17.5 per cent," Luhut Panjaitan, President Joko Widodo's chief of staff, said in an interview in Jakarta on May 8.

"We're going to do it, it's already being ordered by the president," Luhut, 67, said at his office in the state palace. "It's not going to be too much gap from Singapore."

The move adds to plans for a tax amnesty as the government tries to lift revenue collection. Widodo, known as Jokowi, needs more funds to fulfill election pledges to improve the nation's infrastructure and reach a target of 7 per cent economic growth.

Join ST's Telegram channel and get the latest breaking news delivered to you.