President Widodo urges regional govt to cuts land and building acquisition taxes facility for REITs

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Photo by Cabinet Secretary

JAKARTA (TheInsidersStories) – President Joko Widodo urges regional government to releases governor, major or regent regulation on the land and building acquisition taxes facility for Real Estate Investment Trusts (REITs) to develop the market in Indonesia.

On Monday, president held a briefing with related ministries, 12 governors, 14 mayors and six regents at the State Palace.  The government has address the issue in its fifth economic stimulus package by cutting a revenue tax on REITs from 5 percent to 0.5 percent.

But, the state government has a difficulties to cut the land and building acquisition taxes because the authority in the regional government hands. Currently, the tax set at 5 percent.

“The land and building acquisition taxes facility for REITs is to be slashed in order to be competitive, whether through gubernatorial, regent’s or mayoral regulations. If this can be done quickly, investment in the regions will surely pick up,” Widodo said.

Coordinating Economic Minister Darmin Nasution, beside REITs, other instrument to push go to the market are asset back securities, limited investment fund based on infrastructure projects and trustee. Indonesia needs to issue various instrument to absorb repatriate fund on tax amnesty law implementation.

Until June, total mutual fund products reached 1,228 with net asset value of  Rp309,44 trillion higher than the position of the end of 2015, namely 1,091 products and net asset value of Rp271,97 trillion.

OJK releases new regulation on REITs

To support the government’s fifth economic policy on REITs, Financial Service Agency (OJK) has released the Financial Services Authority (POJK) No. 23/POJK.04/2016 of the fund in the form of Collective Investment Contract which is the addition of the previous regulations.

The improvement referred POJK provisions are as follows:

The addition of relevant provisions of the Mutual Fund name.

Name of the Fund in the form of Collective Investment Contract shall reflect the name of the Investment Manager, a name that reflects the type of mutual fund, and denominated in foreign currency that is used when using a currency other than Rupiah.

Addition of Securities that may be the underlying asset of the investment portfolio of the Investment Fund in the form of :

Debt Securities or Islamic Securities fixed income were offered through a Public Offering and has received ratings from rating agency securities, asset-backed securities were offered through a Public Offering and has received ratings from rating agency securities, and Unit Contract Collective Investment Real Estate were offered through a Public Offering with the limits at any time as a whole is not more than 15% (fifteen percent) of the Net Asset Value of the Fund.

Derivative securities with a net global exposure limit value of more than 20 percent of the Net Asset Value of the Fund at any time; and/or Other effects that set the Financial Services Authority. The addition of the provisions related to the transfer of ownership of Mutual Fund Units of Collective Investment Contract through inheritance or grants.

Expansion of funding sources Participation Unit Fund in the form of Collective Investment Contract that comes from the prospective holder of Participation Unit Fund in the form of Collective Investment Contract, the family members of candidates Unit holder of Fund in the form of Collective Investment Contract, the company work from the prospective holder of Participation Unit Investment Funds Collective Investment contract; and/or the Investment Manager, Mutual Fund Sales Agent and/or associations related to the Fund, in connection with gifts in order marketing activities Unit Fund in the form of Collective Investment Contract.
The addition of relevant provisions of the transfer of Units of a mutual fund to the Mutual Fund Units else that can only be done between Mutual Funds managed by the same investment manager.

The addition of the provision that the confirmation of the purchase (subscription), resale (redemption), and the transfer of Units (switching) and monthly reports can be delivered to customers electronically.

Changes in the mechanism of monitoring the suitability of the composition of the portfolio of the Investment Fund by the Custodian Bank with the investment policy set forth in the Collective Investment Contract and the Prospectus and restrictions investments set in POJK, where the Custodian Bank does not need to submit a letter of reprimand to the Investment Manager in the case of a discrepancy composition securities portfolio mutual Fund is not due to securities transactions carried out by the Investment Manager (passive breach), for example due to the movement of the Fair Market Value of Securities portfolio or for their redemption.

The addition of relevant provisions of the Investment Manager cooperation with other parties to make a sale Investment Fund including other parties who have an electronic system (fintech). Simplification of documents submitted to the FSA at the time of Registration Statement for a Public Offering Fund.

Decrease in minimum compliance with the Mutual Fund managed funds to at least Rp10 billion in the period of fulfillment of which was extended to 90 days from the effective exchange and funds under management for Protected Fund, Guaranteed Investment Fund, and Index Fund to at least Rp10 billion in the period of fulfillment of which was extended to 120 days from the effective exchange.

Changes in the obligation period Investment Manager to manage the Portfolio Securities in accordance with the investment policy set out in the Collective Investment Contract and / or the Prospectus as well as the fulfillment of investment policy be no later than 150 (one hundred fifty) trading days after the effectiveness of the Registration Statement of Mutual Funds.

The addition of the dissolution provisions of the Investment Fund in the Investment Manager license has been revoked. Regulation of the Financial Services Authority No. 23 / POJK.04 / 2016 of the Fund in the form of Collective Investment Contract shall take effect on the date of promulgation.

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Source: The Insiderstories
President Widodo urges regional govt to cuts land and building acquisition taxes facility for REITs

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