"Foreign investors have brought funds to the emerging market of Indonesia pushing it ahead of neighboring countries including Singapore, Malaysia, and Thailand," Analyst and market player Hendri Setiadi said.
Jakarta (ANTARA News) - The Indonesia Stock Exchange (BEI) is of the view that industry players in the capital market expect the tax amnesty program to succeed and have a positive impact on the countrys economic development.

"The Indonesian capital market is ready to support the implementation of the tax amnesty policy, both in terms of regulation and infrastructure," said President Director of BEI Tito Sulistio on the sidelines of the inauguration of the Tax Amnestys Integrated One-Stop Services (One Stop Service) in Jakarta on Wednesday.

He added that the one-stop integrated services will facilitate the taxpayers to consult about the tax amnesty, the payment rate of the tax amnesty, as well as seek answers to questions about capital market investment products and the "gateway" facilities such as securities companies.

"The success of this policy will have a positive impact, not only on the fiscal management of the country, but also the sustainability of growth in national economic activity going forward," he noted.

The Tax Amnestys One-Stop Integrated Service was inaugurated by Finance Minister Sri Mulyani Indrawati, also commemorating 39 years of the reactivation of the Indonesian Capital Market.

On this occasion, Sri Mulyani Indrawati pointed out that the role of the capital market in Indonesias economy is very important and its growth must be continuously encouraged in order to contribute to the welfare of all the people of Indonesia.

Chief Executive of the Capital Market Supervision of the Financial Service Authority (OJK) Nurhaida observed that Indonesian capital market supported and was committed to the success of the tax amnesty program.

"I call upon the capital market players in Indonesia to make the tax amnesty program a success and optimally utilize the momentum created by the declaration of wealth and tax repatriation. This is not only in the interest of the national capital market but is also in the interest of the nations independence. It will help improve the peoples welfare," Nuhaida stressed.

Analyst and market player Hendri Setiadi has earlier said the stock market in Indonesia has reacted positively to the tax amnesty policy as indicated with soaring market capitalization.

The capitalization of the stock market at home since early this year has been recorded at a high level and considered the highest in the world, reaching Rp5,676.6 trillion as of July 27.

Seeing this development and with numerous companies going to float shares through the initial public offering (IPO) mechanism, the BEI is optimistic that the capitalization of the domestic capital market this year will reach Rp6,000 trillion.

The increase in the value of the capitalization of domestic capital market is in line with the increasing number of companies issuing their shares in the stock exchange through the IPO mechanism.

There are seven companies which are now in the process of floating stocks through the IPO. If the process runs smoothly, the capitalization of our market can reach over Rp6,000.

"The record performance has been predicted by financial analysts and market players," Hendri Setiadi said in a statement last month. Market capitalization shot up to an all time record at Rp5,639 trillion, exceeding a previous record of Rp5,565 trillion on April 7, 2016.

"Foreign investors have brought funds to the emerging market of Indonesia pushing it ahead of neighboring countries including Singapore, Malaysia, and Thailand," Hendri said.

He said the Indonesian Stock Exchange is open to accommodate and mobilize funds expected to be repatriated into the country as a result of the tax amnesty policy. "The Indonesia Stock Market would be ready to be the vanguard in accommodating the repatriated funds. The stock market could use various investment instruments to absorb the funds such as shares, mutual fund, asset securitization and real estate investment fund," he said on July 27.

According BEI President Director Tito Sulistio, if the tax amnesty program is successful, the liquidity of the Indonesian market will increase. It will then drive banks to lower their interest rates and turn the market sentiment to become more and more positive for the development of domestic capital market, particularly the development of the composite index prices.

In the meantime, Indonesias Financial Services Authority (OJK) has said 18 banks have signed contracts to become partner banks and act as gateways for funds repatriated under the tax amnesty program.

"Previously, only four banks had signed but yesterday in Semarang, the number increased to 18," OJK chairman Muliaman Hadad stated in Jakarta on Saturday.

He pointed out that it was not impossible for more banks to join as many have not yet registered as partner banks but have already expressed their interest to become one.

He informed that the OJK is still formulating the criteria for other banks to become partner banks to accommodate funds repatriated as a result of the tax amnesty program.

"Besides banks, many investment managers have also expressed their interest to join," he added. In addition to 18 banks, a total of 18 investment managers and 19 investment brokers-dealers have also been declared as gateways for the tax amnesty funds.

At least Rp4,000 trillion worth of funds so far stashed overseas are expected to be declared and Rp1,000 trillion of these are expected to be repatriated and invested in the country. The government hopes to earn Rp165 trillion from the tax amnesty program in the form of asset redemption and declaration.(*)

Reporter: Andi Abdussalam
Editor: Heru Purwanto
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