The government issued some technical rules that contain stimulus to boost the state revenue from tax amnesty program that has low realization. The rules contain an additional investment instrument for a placement of repatriation funds and corporate income tax final cut for property purchase transactions. The stimulus is also estimated to increase the revenues for property developers.
Until Tuesday (16/8), the acquisition of tax amnesty compensation has reached 590 billion IDR or 0.4% from a target of 165 trillion IDR. The declaration of taxpayer property reached 28.94 trillion IDR, in details of the domestic declaration of 24.6 trillion IDR, foreign declaration of 3.27 trillion IDR and 1.08 trillion IDR for repatriation funds.
Regulation of The Minister of Finance (Peraturan Menteri Keuangan/ PMK) No 122 2016 regulated the placement of repatriation funds to infrastructure projects, land and building properties, gold bullion, and other investments besides the financial markets. Meanwhile, Government Regulation No 34 2016 decreased final corporate income tax for property sales from 5% to 2.5% and land or building sales by the government and state-owned enterprise with special duty by 0%.
DBS Vickers said that corporate income tax final cut for property sales will encourage company’s revenue for property developers. Corporate income tax final cut impacts will be appear in the fourth quarter of 2017. The potential of revenue growth in 2017 for Alam Sutera Realty Tbk (ASRI) is predicted reach 7%. In 2018, potential revenue growth for Lippo Karawaci Tbk (LPKR) will reach 22% while Ciputra Development Tbk (CTRA) will reach 12%.
In trading on Tuesday (16/8), ASRI’s share decreased by 0.9% to 535 IDR, LPKR is stagnant at 1.150 IDR, while CTRA increased by 1.8% to 1.655 IDR. (*)
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