A number of agreements were reached during the Annual Leaders Meeting between Indonesian President Joko Widodo and Singapore Prime Minister Lee Hsien Loong at The Istana, Singapore, on Tuesday (October 8). At the meeting, both leaders agreed to push the completion of bilateral investment treaty ratification process was signed on May 8, 1990.

The countries also signed bilateral liquidity management arrangements, Flight Information Region (FIR), export – import data, and vocational education. In addition, the two also agreed to increase cooperation in the fields of electronic commerce, financial technology, data services, techno park development, and regional innovation hubs.

The Indonesian government has tried to renegotiate the tax treaty with Singapore to boost the tax revenues in the country. Days ago, director at the directorate general of tax at the ministry of finance, John Hutagaol said, the benefits of the Indonesia – Singapore tax treaty had the potential to be misused, in the sense, enjoyed by taxpayers who should not enjoy it.

He said, when investors from Indonesia buy bonds issued by the government through banks or securities in Singapore, they will not be taxed on the interest income earned. While, if buying using a bank or securities in Indonesia interest income taxable 15%.