Indonesia’s investment minister has dismissed the global minimum tax plan as a self-serving 'trick’ being pulled by developed countries.
Speaking at the 55th ASEAN Economic Ministers’ Meeting in Indonesia on August 19-20, 2023, Indonesia’s Investment Minister Bahlil Lahadalia said the global minimum tax scheme was designed to benefit developed countries and should be reviewed.
Lahadalia said that the application of global minimum tax rules, as they exist today, will not produce the same results for developed and developing countries. Developed countries should accommodate developing countries to attract investment to achieve overall growth, he said.
“The Global Minimum Tax scheme will only benefit a select group of countries. We don’t want this,” Lahadalia told the audience.
Global minimum tax rules proposed by the OECD ensure that large multinational corporations pay a minimum level of tax on income arising in each jurisdiction in which they operate.
More specifically, the tax laws provide for a unified system of taxation, which imposes a top-up tax on profits arising in a jurisdiction where the effective tax rate fixed in that jurisdiction is less than the minimum rate of 15 percent.
Lahadalia said global minimum tax rules, if implemented too quickly, would lead businesses to focus on investments in their own developed countries and disrupt downstream investments in ASEAN countries.
Lahadalia said the global minimum tax was „nothing but a ploy by developed countries” and added that the tax policy would force developing countries to send raw materials to developed countries.
„We already understand this trick. Don’t think we don’t understand anymore,” he told the participants.
The minister said that developing countries need more incentives to attract investment, so the taxation policies of developed countries cannot be applied uniformly in developing countries.
The meeting was attended by senior government officials from Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
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