Indonesia’s Finance Ministry has discussed tax policies to address global economic challenges at the 2nd International Tax Forum (ITF) in Kuta, Bali, being held from September 24 to 26, according to Antara News.
Febrio Kacaribu, head of the ministry’s Fiscal Policy Agency (BKF), noted on Tuesday (24/9/24,) that the 2nd ITF serves as an important forum for diplomacy and coordination, featuring bilateral meetings with Indonesia’s strategic partners.
He believes the forum will significantly contribute to effective international tax cooperation.
“In this forum, robust and sustainable policy recommendations can be developed to navigate the complex issues in international taxation,” he said, affirming that the collaboration would push Indonesia towards a fairer and more efficient global tax system.
Finance Deputy Minister II Thomas Djiwandono, who attended the event remotely, pointed out two global economic challenges in his remarks, says Antara News.
The first aspect he highlighted was the rapid development of digital technologies, which makes it easier for multinational companies to operate across countries and earn significant income without the need to be physically present in their market countries.
Secondly, he noted challenges related to the international tax system, where competition in tax rates encourages practices like Base Erosion and Profit Shifting (BEPS).
Antara News reports that to address this, countries participating in the Inclusive Framework (IF) on BEPS have agreed on the Pillar 2 solution, which includes the Global Minimum Tax and Subject to Tax Rules (STTR).
The Global Minimum Tax has been implemented in over 40 countries, such as Vietnam, Australia, Japan, South Korea, the European Union (EU), among several others.
On September 19, 2024, Indonesia and several other countries signed the STTR Multilateral Instrument (MLI), according to Antara News.
“If Indonesia does not implement Pillar 2, then the potential tax will be taken by other countries,” Djiwandono said.
Source: Antara News
Stock image by Gerd Altmann from Pixabay
The post International Tax Cooperation Needed to Address Challenges appeared first on Invest Indonesia.
