Indonesia is reconsidering its commitment to implementing the 15% global minimum tax following the United States' recent policy shift. Coordinating Minister for Economic Affairs, Airlangga Hartarto, indicated that Indonesia might abandon the tax plan, a move influenced by President Donald Trump's decision to withdraw the U.S. from the global tax agreement.

"We are learning how to mitigate the implementation of the 15% global minimum tax. With Trump 2.0 opposing it, I think we will follow suit," Airlangga stated in Jakarta on Tuesday, as reported by detik.com.

Indonesia had planned to enforce the global minimum tax starting from the 2025 tax year, based on the Ministry of Finance Regulation No. 136/2024. This policy was part of a broader initiative coordinated by the Organisation for Economic Co-operation and Development (OECD) and supported by over 140 countries.

However, President Trump's recent executive order effectively nullified the U.S.'s participation in the agreement, declaring that the global corporate minimum tax deal "has no force or effect" in the country. This move has significant implications for international tax cooperation and has prompted other nations, including Indonesia, to reassess their positions.

In light of these developments, Indonesia continues to optimize its tax incentives, such as tax holidays and allowances, to maintain an attractive investment climate. Airlangga emphasized the importance of these measures in ensuring Indonesia remains competitive in the global market.

The global minimum tax aimed to prevent tax base erosion by ensuring multinational corporations with consolidated global revenues of at least €750 million pay a minimum tax rate of 15% in the countries where they operate. With the U.S. withdrawal, the future of this initiative appears uncertain, leading countries like Indonesia to reconsider their commitments.

PHOTO: VIVA JATIM/IST

This article was created with AI assistance.