Indonesia Cuts Bond Income Tax for Local Investors to Record Low
- Rate for foreign investors has been cut to 10% as of Aug. 1
- Indonesia has tapped central bank to help finance deficit
The central business district in Jakarta, Indonesia.
Photographer: Dimas Ardian/BloombergThis article is for subscribers only.
Indonesia is cutting the income tax rate on bond interest to a record-low 10% for domestic investors, putting it on par with the rate for foreign funds.
The change is set to reduce distortions in bond prices between local and global investors, the government said in a revised regulation that took effect on Aug. 30. The new rate, lowered from 15%, applies to Shariah-compliant and conventional bonds sold by the government and companies.