BOGOR (TheInsiderStories) – Indonesia and Singapore signed the new tax treaty, which first came into force in 1991, at the bilateral meeting of the two leaders, today (02/04). The renewed double taxation is expecting will reduce the withholding tax rate for royalties and branch profits.
This was stated by Singapore President Halimah Yacob and President Joko Widodo at the Bogor Palace, West Java. Both countries also signed a customs law collaboration between the Directorate General of Customs and Excise, Ministry of Finance and Singapore Police Coastguard.
“I am very satisfied with the progress of our cooperation, among others, the signing, the first completion of the negotiation agreement on double taxation avoidance,” Widodo said.
The cooperation agreement was also entered between Bank Indonesia and the Monetary Authority of Singapore (MAS) in managing forex on a bilateral basis. In November 2019, the two central banks agreed to increase cooperation in bilateral liquidity management arrangements (BLMA) as part of deepening the financial markets.
“This renewed agreement sends a strong signal the commitment of the two countries to strengthen economic cooperation in the midst of a challenging global economic situation,” said Yacob, hoping the renewal will benefit both countries, especially in the investment and trade sector.
Singapore and Indonesia share close trade and investment ties, with bilateral trade amounting to US$65 billion in 2018, a 9.4 percent increase from the year before.
“Singapore has been Indonesia’s top foreign investor for the past six years. This demonstrates Singapore’s confidence in Indonesia’s vibrant economy,” said Yacob, remarks her first to Indonesia and the first Singapore head of state to the country in about eight years.
The two leaders also discussed Singapore-Indonesia partnership in human resource development. President Yacob highlighted the establishment of the Kendal Polytechnic, an educational institute in Indonesia that will help produce trained workers for the Kendal Industrial Park.
The 2,700ha park in the bustling port city of Semarang, which was officially opened in 2016, has attracted investments valued at $843 million and will create more than 8,000 jobs.
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