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The government will expedite the drafting of a taxation
regulation that will provide incentives for companies willing to go
public amid a surging inflow of capital to local capital markets, a
minister has said.
"We'll get it done as soon as possible. I have asked the Director
General of Taxation, Darmin Nasution, and the Capital Market
Supervisory Agency head Fuad Rahmany to discuss the possibility of
introducing the incentive scheme by looking into current taxation
laws," Finance Minister Sri Mulyani Indrawati said Saturday.
Fuad added that the incentive scheme might be issued through a
government regulation or a ministerial decree and if so would not have
to wait for the enactment of tax bill packages currently under
deliberation in the House of Representatives.
Despite pressure from businesses and investors, the House failed to
pass the much-awaited taxation law early this year as planned due to a
prolonged debate on certain key articles of the bill.
Having acknowledged rising capital inflow in local markets, Sri Mulyani
said the planned incentives would send a message to the private sector
about the lucrative prospects of raising funds from capital markets.
"The gap between the amount of incoming capital and the availability of
listed firms to invest is now widening. This incentive will be a way to
meet rising demands," she said.
According to Bank Indonesia, as of May 10, foreign investors held up to
Rp 45.3 trillion of the total Bank Indonesia promissory notes of (SBI)
Rp 257.6 trillion. In January they also held up to Rp 71.2 trillion of
a total Rp 442 trillion in government bonds.
On the stock market, the net value of transactions made by foreign
investors stood at Rp 2.3 trillion as of March, up from Rp 552 billion
in January.
Sri Mulyani said the government would also relax its regulations to
encourage more local companies to go public.
"We will reduce the cost of becoming a public firm by easing existing
regulations without overlooking their basic principles," she said,
adding that capital market regulators should also create conducive
market conditions for all players and simplify the listing process.
Erry Firmansyah, Jakarta Stock Exchange (JSX) president director, said
many firms were still reluctant to be listed on the exchanges because
they were unwilling to publicly disclose their business situations.
"It is not the fee that hinders them from listing their firms on the
bourse. It's about transparency. They are reluctant to reveal the
problems of their companies to the public," he said.
The fees imposed by exchanges on listed companies range between Rp 20
million and Rp 100 million on average.
Erry previously said that he expected between 8 and 10 firms to go
public in the first half of this year. As of April, there were five new
firms listed as new members of the bourse.
State-owned toll operator Jasa Marga and contractor Wijaya Karya are
also expected to launch their initial public offerings on the stock
exchange as part of the government's privatization program.
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