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MoF Chatib Basri & Tax Holiday Luggage
Other than final decision on 7% shares of Newmont Nusa Tenggara and development of US$10 billion Sunda Strait Bridge, the newly installed minister of finance Chatib Basri carries a heavy luggage called 'Tax Holiday'. His predecessor Agus Martowardojo was considered stingy for granting the holidays to Prajogo Pangestu's butadiene project and Unilever's oleochemical investment. ,Last Updated ( Wed, 22 May 2013)
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| Revisiting 5% Tax Rate Cut
Ownership change at Matahari Department Stores (LPPF) from 98% controlled by Asia Color Company Ltd to 'public 47.85%, Multipolar 20.48%, and Asia Color 31.67%' makes the retailer eligible to get 5% tax rate cut this year. Others have earlier enjoyed the facility (pursuant to Government Regulation No. 81/2007). But, this might be the time to revisit the policy. (Tue, 14 May 2013)
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| Widening Budget Deficit
Lower crude oil production and higher crude price risk the State of an additional US$4 billion subsidy for fuel. This already enough to boost budget deficit to 3.8%. Tax revenues, meanwhile, provided a gloomy picture in the first quarter due to pressures on resources industry (coal, palm oil, rubber, metals), which make up almost 30% of the country's total export. (Wed, 08 May 2013)
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| • Resources Sector-Triggered Crisis | Economy | Crude palm oil (CPO) declines slightly this morning in the futures market. Indonesian coal benchmark price for May 2013 declined further to US$85/ton. We have seen more coal producers reporting loss, especially those with huge debts. In the palm oil sector, we have only seen two companies in red, Bakrie Sumatra Plantations and Provident Agro. | |
| • Market Correction: Overrating Standard & Poor's | Economy | Media and analysts, international and national, immediately jumped into conclusion that the recent downgrade of Indonesia's prospect by Standard & Poor's contributed to the market correction. The conclusion is just another good promotion for the rating agency amidst lawsuit filed by US Justice Department against S&P, alleging its ratings during the housing bubble misled and defrauded investors. | |
| • MAY DAY: Higher Labor Costs | Economy | Thousands of workers plan nationwide rallies today demanding higher salaries and better compensations. Hundreds of factories have also decided to close down their operations. We have our own way to commemorate the May Day by looking into growing labor costs of companies listed on Indonesia Stock Exchange (IDX). | |
| • Falling Commodities & Our Economy | Economy | Nymex crude oil dropped 4.27% to US$87.4 per barrel in New York last night, while gold plummeted 10% to US$1353 per ounce. Earlier on Monday, palm oil dropped further by more than 2% to RM2301 per ton for July 2013 deliveries. Should we worry about them? | |
| • Transfer Pricing Issues to Watch | Economy | The outgoing minister of finance Agus Martowardojo openly criticized national and multinational companies for their tax payments. Agus said hundreds of multinationals that have not paid any tax in seven years. He also revealed about transfer pricing practices committed by people in the plantation sector. | |
| • New Market: DMO Credits 'Cap & Trade' | Economy | Minister of Energy and Mineral Resources Regulation No 34/2009, which requires mining companies to sell a portion of their output to domestic customers (domestic market obligation), has created to market for the so-called DMO credits, wherein mining companies that exceed their DMO obligations may sell/transfer DMO credits to a mining company that is unlikely to meet its DMO commitment. | |
| • Banking Statistics: Interesting Trends | Economy | Bank Indonesia has just released its banking statistics for February 2013. Total net profits of banks inched up only 3.5% to Rp20.3 trillion for Jan-Feb 2013 agains the corresponding period of 2012. Outstanding of vehicle ownership loan declined further by Rp1 trillion in February 2013, while home ownership loans grew Rp2.7 trillion that month. | |
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