Job Creation Law Pushes for Fundamental Reforms, Sri Mulyani Says

Minister of Finance Sri Mulyani Indrawati attends the 2020 National Tax Conference held online, Thursday (3/12). (Photo by: PR of Finance Ministry)

The Job Creation Law constitutes an extraordinary fundamental reform to create healthier competition in the country, increase productivity, and develop community innovations, Minister of Finance Sri Mulyani Indrawati has said.

“In the Job Creation Law, there is a section related to the taxation sector. The community can execute their innovative ideas, various initiatives, and capital utilization can be invested productively,” the Minister said at the 2020 National Tax Conference held online, Thursday (3/12).

According to her, the Job Creation Law is also a Government policy in supporting the national economic recovery so that Indonesia has a robust, productive, and competitive economic foundation.

“We will continue to improve the Government’s capability in boosting our economy so it can recover. This becomes a prerequisite for us to support the health of our country’s finance,” she said.

In the taxation cluster, the Government reduced the corporate income tax rate gradually, removed income tax on domestic dividends, regulated non-object of income tax on the profit-sharing or the remaining business income from cooperatives or from hajj financial management funds.

In addition, the Government also exempted capital participation in the form of assets that are not subject to VAT payable, certain income, including dividends originating from abroad. If those are invested in Indonesia in the form of investment, it will receive an income tax exemption.

“Various resources are expected to flow into productive activities so we can create job opportunities, especially in community groups in which its demographics dominated by the youth,” she added.

On that occasion, the Minister also stressed that the ministry will constantly push taxpayer compliance and payment through laws and regulations in the taxation sector, including the taxation cluster in the Job Creation Law so that the obligation to pay taxes will be fulfilled voluntarily, more easily, efficiently, and clearly. (PR of Finance Ministry/UN)  (RIF/MUR)