JAKARTA (Reuters) – An Indonesian candidate for president, Ganjar Pranowo, promised on Tuesday to ensure legal certainty for foreign investors and tax reforms that will double the government’s spending capacity if he is elected to the highest office.
The certainty issue ranks among investors’ key concerns for doing business in Indonesia, said Ganjar, a former provincial governor and the first of three contenders set to speak at an American Chamber of Commerce event.
“Illegal fees must be eradicated, services must be made cheaper, faster. We must provide legal certainty by enforcing the law,” added Ganjar, who narrowly trails defence minister Prabowo Subianto, the frontrunner, in election surveys.
As Indonesians prepare to vote for their next leader on Feb. 14 next year, ex-general Prabowo and former Jakarta governor Anies Baswedan will speak later at Tuesday’s event.
Incumbent Joko Widodo, who must step down after serving a maximum of two terms, has brushed off fears that he is building a political dynasty, saying the people’s votes would decide.
Ganjar, who has a law degree, has promised to boost the average growth of Southeast Asia’s largest economy to 7% if he wins the next five-year presidential term, up from last year’s growth of 5.3%.
With a running mate who is a former top judge, Ganjar also pledged to digitalise the tax system in an effort to boost tax revenues and double the national budget, despite the absence of any proposal for tax hikes in his policy platform.
At about a tenth of GDP, the tax ratio in Indonesia is among the lowest in the Asia-Pacific region, and governments have relied on inducements such as tax amnesties in efforts to boost tax collection.
However, authorities going after participants of previous tax amnesties was an example of the lack of legal certainty Ganjar looked to resolve, he said, while threatening to replace the non-performers among tax officials.
He stopped short of detailing how he planned to boost revenue.
Ganjar also pitched a proposal for a special economic zone to lure U.S. pharmaceutical companies such as Pfizer, Johnson & Johnson and Merck, with tax incentives to make drugs and carry out research in Indonesia that could avert the next pandemic.
(Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and Clarence Fernandez)
