Indonesia Will Purposes Cut Tax on Deviden

Indonesia proposes to cut tax rate on dividends,
and 16,8% millionares in Indonesia

JAKARTA, June 24 (Reuters) -
www.reuters.com

JAKARTA, June 24 (Reuters) - Indonesia plans to lower the tax rate on dividends to 15 percent from 20 percent in an effort to improve the investment climate and encourage the development of financial markets, the tax chief said on Tuesday.

The government is keen to develop the country's young financial market by improving regulations and providing tax incentives for people still wary of investing in the stock market.

"We want to attract more people to invest and not only put their money in banks ... The substance of the new tax bill is to improve our investment climate," Darmin Nasution said.

"The discussion is whether a tax rate of 15 percent would provide a sufficient incentive."

The government is hoping to draw more people to put their funds in the market by cutting the tax rate on dividends which currently is the same as that on bank interest.

The plan is one of a string of measures in a new tax law being drafted by Indonesia aimed at tackling widespread tax evasion and providing tax incentives to investors in Southeast Asia's biggest economy.

Indonesia's parliament is expected to pass the tax bill in the third quarter. The bill also proposes to cut income tax levels for individuals and corporations in a bid to attract investors to open businesses.

Many investors, however, still cite corruption, red tape and an unpredictable legal system as deterrents to investing in Southeast Asia's biggest economy.

Mean while, 16,8% Indonesia new millionaires increases this years...

www.globes.co.il

The World Wealth Report defines a millionaire as a person with at least $1 million in liquid assets, excluding capital invested in assets and after deducting liabilities. The average wealth of the millionaires worldwide is $4 million.

A comparison with the increase of millionaires in other emerging markets shows that Israel is well below the average. The number of Indian millionaires rose by 22.7% compared with the previous survey, due in great part to the 11.8% annual growth rate by the Bombay Stock Exchange. China had the second fastest rate of growth in millionaires, with a 20.3% increase, followed by Brazil with 19.1%, South Korea - 18.9%, and Indonesia - 16.8%.