ASEAN calls for review of Global Minimum Tax - AIA Chair

JAKARTA – Chair of the ASEAN Investment Area (AIA) Council Bahlil Lahadalia has called for the review of the Global Minimum Tax (GMT) as its implementation is considered to benefit only certain countries.

"The adoption of global minimum tax will affect investment incentives. We decided that it needs to be reviewed, to prevent it from only benefiting one particular group of countries," Lahadalia, concurrently Indonesia's Minister of Investment/Head of the Investment Coordinating Board (BKPM), said in a statement received here on Sunday.

According to him, only developed countries with strong investment competitiveness will benefit from the GMT implementation, therefore, it needs to be reviewed.

He conveyed the request to review GMT during the 55th ASEAN Economic Ministers (AEM) Meeting, in Semarang, Central Java on Aug. 19.

According to Lahadalia, developed countries must open up space for developing countries to attract investment to achieve progress.

"Developed countries should give a space for developing countries to accelerate their adjustment so that we are already at the same level when implementing global taxation," he said.

Lahadalia argued that early implementation of GMT will disrupt the downstreaming program being promoted by the Indonesian Government, as investors from developed countries will return to invest in their home countries.

"Global minimum tax of 15 percent will cause developing countries that are pushing downstreaming to experience major obstacles because investors who have the technology will invest in their home countries instead," he explained.

The GMT policy will also force developing countries to send raw materials to developed countries. Lahadalia assessed that GMT is nothing more than the trickery of developed countries.

Moreover, he said, developing countries need more incentives to attract investment, so the taxing policies of developed countries cannot be applied in developing countries without adjustments. (Antara)