Indonesia's Incoming President Considers Corporate Tax Cut

JAKARTA (Reuters) – Indonesia's incoming president, Prabowo Subianto, will review the possibility of cutting the corporate income tax to 20% from 22%, according to CNBC Indonesia citing an adviser.

Prabowo, set to take office on October 20, has pledged to improve tax compliance and aims to boost tax revenue to 18% of the gross domestic product. His team has indicated plans to separate the finance ministry's tax and customs offices to create a state revenue agency.

"We do hope that at some point we can reduce corporate income tax," said Dradjad Wibowo, an adviser to Prabowo.

Dradjad could not be reached for comment on Sunday.

Foreign investors have expressed concerns regarding Prabowo's plans to expand the number of government ministries, fearing it may compromise fiscal discipline in Southeast Asia's largest economy. However, a senior aide stated that Prabowo will adhere to the agreed spending levels for 2025 and follow existing budget rules.

The decision on a corporate tax cut will depend on government revenue conditions, as Dradjad mentioned: "We will see how the state revenue performance is; if there is an opportunity for it, we want to reduce it so that it is not too burdensome for the people."