Indonesian And Australian Tax Policy Implementation In Food And Agriculture Industry

Abstract

Tax policy is one of the most important policy in consideration of investment development in certain industry. Research by Newlon (1987), Swenson (1994) and Hines (1996) concluded that tax rate is one of the most important thing considered by investors in a foreign direct investment. One of tax policy could be used to attract foreign direct investment is income tax incentives. The attractiveness of income tax incentives to a foreign direct investment is as much as the attractiveness to a domestic investment (Anwar and Mulyadi, 2012).
 In this paper, we have conducted a study of income tax incentives in food and agriculture industry; where we conduct a thorough study of income tax incentives and corporate performance in Indonesian and Australian food and agriculture industry. Our research show that there is a significant influence of income tax incentives to corporate performance. Based on our study, we conclude that the significant influence of income tax incentives to Indonesian corporate performance somewhat in a higher degree than the Australian peers. We have also concluded that Indonesian government provide a relatively more interesting income tax incentives compare to Australian government. However, an average method of net income –a method applied in Australia– could be considered by Indonesian government to avoid a market price fluctuation in this industry.

Keywords: {'name': 'tax policy'}, {'name': 'income tax incentives'}, {'name': 'food and agriculture industry'}, {'name': 'tax rate'}, {'name': 'foreign direct investment'}, {'name': 'domestic investment'}

Authors & affiliations

Martin Surya Mulyadi
Affiliation not supplied

Maya Safira Dewi
Affiliation not supplied

Yunita Anwar
Affiliation not supplied

Hanggoro Pamungkas
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

DOI: 10.19030/jabr.v27i4.4652

DOI: 10.5897/AJBM11.421

Anwar Y. and Mulyadi, M. S. (2011). Income tax incentives on renewable energy industry: Case of USA, China, and Indonesia. The Business Review Cambridge, 17(2): 153-159.

Anwar, Y. and Mulyadi, M. S. (2012). Analysis of income tax incentives for transportation industry in Indonesia. The Business Review Cambridge, 19(2): 323-329.

Anwar, Y. and Mulyadi, M. S. (2012).Analysis of income tax incentives in Indonesia. Global Business and Economics Research Journal, 1(2): 81-92.

DOI: 10.1093/0198292163.001.0001

DOI: 10.2307/2554814

Deskins, J. A. (2005). Essays on the behavioral effects of tax policy. Dissertation. The University of Tennessee.

Fernandez de Soto Blass, M. L. (2011). Tax incentives to foster green investments under the spotlight of state aids’ prohibition. The Business Review Cambridge, 17(2): 68-74.

DOI: 10.2307/2109519

DOI: 10.1086/NTJ41791979

Hines, J. R. (1996). Altered states: taxes and location of foreign direct investment in America. American Economic Review, 86: 1076-1094.

Holland, D. and Vann, R. J. (1998). Tax law design and drafting. 2nd Volume. International Monetary Fund.

Hutagaol, J., Darussalam and Septriadi, D. (2006). Advance topic in taxation (Kapita selekta perpajakan). Jakarta: Salemba Empat.

DOI: 10.1016/0176-2680(85)90003-5

DOI: 10.1016/S0047-2727(03)00060-4

Mulyadi, M. S., Anwar, Y. and Siagian, F. (2012). Study of income tax incentives in creative industry. International Journal of Arts and Commerce, 1(6): 21-24.

Newlon, T. C. (1987). Tax policy and the multinational firm’s financial policy and investment decision. Dissertation, Princeton University.

DOI: 10.17848/9780585284415

Republic of Indonesia. (2011). Indonesian Government Regulation 52/2011. Jakarta: Government of Republic of Indonesia.

DOI: 10.1177/109114219602400401

DOI: 10.1016/0047-2727(94)90062-0

DOI: 10.1057/palgrave.jibs.8490670

DOI: 10.1023/A:1017925721627

DOI: 10.1007/s10797-010-9140-1

Wasylenko, M. (1997). Taxation and economic development: The state of the economic literature. New England Economic Review, March: 37-52.

DOI: 10.1086/NTJ41788713