Syariah Bonds’ Tax 10 Percent
Friday, 05 January, 2007 | 13:05 WIB

TEMPO Interactive, Jakarta: The Directorate General of Tax agreed that syariah-based bonds (sukuk) tax is only imposed once by value-added tax (VAT). “The point is not to impose the tax twice ,” Tax Directorate General, Darmin Nasution, told Tempo in Jakarta.

The amount of the VAT rate for syariah bonds, he said, will be equal to the conventional bonds, 10 percent. “The rate is the same with other obligations so that (syariah bonds) are not too expensive.”

The syariah bonds tax regulation, he said, will be included in the amended Tax Decree, which is currently being discussed by the House of Representatives (DPR) members.

So far market players are in fact complaining about double levies on syariah bonds. Tax is imposed twice because the bonds are issued through a trustee as the representative of the bonds holder.

Director General of Debt Management, Rahmat Waluyanto, said that there is a misunderstanding between tax officials and syariah bonds market players. Tax officials regard that there are two transactions: from syariah bonds issuer to trustee then from trustee to bonds investor. “Actually the transaction is one time, although there are two transfers. There isn’t any value-added tax whatsoever,” he said.

“So we ask that the tax is only once, not twice, because that is the way of the international practice,” he said.

The Syariah bonds market potential is large. The growth of profit-sharing bonds value is also fantastic. In 2002, syariah bonds value only reached US$1.2 billion. In the end of 2006, it is estimated that the value totalled US$15 billion.

Countries in Asia and Europe have already issued syariah bonds to anticipate the future of syariah-based bonds. “If Indonesia is not quick, it will lose its opportunity,” said Rahmat.

Currently the government has not yet issued syariah bonds because it is still completing the State Syariah-based Bonds Decree.

Rahmat said the Syariah Bonds Decree is not a lex specialis which can arrange matters including syariah bonds’ tax. “That’s because we follow only one tax system.”

AGUS SUPRIYANTO