Indonesian stocks and country-specific exchange traded funds rebounded along with global markets off the Brexit selling, and the emerging market found further support after Indonesia’s parliament approved a tax amnesty bill.
Indonesian markets bounced after parliament approved a tax amnesty that the government believes would draw in billions of dollars to finance a budget gap as the country invests to expand its infrastructure in a bid to stimulate economic growth, Bloomberg reports.
“It (tax amnesty) is directly positive for construction and indirectly positive for property, banks, along with the domestic economy,” according to Trimegah Securities, Reuters reported.[related_stories]
Individuals who repatriate undeclared assets held abroad would only face a 2% to 5% penalty, according to the bill. Those who decline to repatriate the funds could face a 4% to 10% penalty. The tax amnesty rates are well below tariffs for income tax, which currently sit at 5% to 30% for individuals and 20% to 25% for companies, Reuters reported.