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Jakarta proposes to end tax-free debt

Plan will affect companies whose debt exceeds four times equity

Published Fri, May 22, 2015 · 09:50 PM

Singapore

COMPANIES the world over have used interest payments to shrink their tax bills. Indonesia, faced with record private debt, is trying something different.

South-east Asia's largest economy plans to ban firms from writing off interest costs against taxable income should debt exceed four times equity. If the finance ministry proposal is enforced next year, heavyweights in the economy such as telecommunications firm PT Tower Bersama Infrastructure could take a hit.

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