Indonesia is currently considering options for setting up tax-haven jurisdictions as it tries to attract investors through the country’s amnesty program, reports Bloomberg.

Indonesia needs money to fund its various infrastructure projects and also to finance the widening budget deficit, according to Coordinating Maritime Minister Luhut Panjaitan.

Both Indonesian and foreign businesses would be able to set up shell companies on islands located approx. 60km from Singapore.

The central bank has said the tax amnesty program could attract approximately $43 billion of funds stashed overseas. It could also encourage greater participation and help President Widodo plug a shortfall in tax revenue, as Indonesia faces the repercussions of a slowdown in China as well as low commodity prices.

However, the plan is still in its early stages.

Both Indonesian and foreign businesses would be able to set up shell companies in Bintan and Rempang, and enjoy lower tax rates. Both islands are located around 60km from Singapore.

The expectation that the amnesty will draw funds into the country appears to be putting upward pressure on the rupiah, domestic asset prices and demand,” said Edward Teather, Senior Economist at UBS Group in Singapore.

This initiative will also put Indonesia as a direct rival to Singapore, as it would prevent taxpayers from keeping their assets offshore in Singapore.

A version of this appeared on Bloomberg on August 14. Read the full version here

Indonesia online marketplace has teamed up with the Indonesian Stock Exchange to help out small and medium enterprise owners join the tax amnesty program, reports The Jakarta Globe.

The partnership was cemented by the signing of a partnership agreement between Indonesian Stock Market Clearing House, the Indonesian Stock Exchange and the Indonesian Central Securities Depository.

Bukalapak was established in 2010 and helps SMEs sell on its marketplace. The company will put the information on the mechanism of the tax amnesty schemes on its website and forum to allow tenants hold a discussion, aiming to give them a better understanding of the issue.

Muhammaad Fajrin Rasyidi, Co-Founder of Bukalapak, comments,

This cooperation with IDX will give greater benefits to the entrepreneur of small and medium enterprises as they have limited information on tax amnesty. 

The government launched the implementation of the tax amnesty program on Monday, hoping to return funds invested overseas by wealthy Indonesians by offering a discount of taxation to funds repatriated by March 2017.

Assets need to be kept in the country for at least three years and can be invested in a variety of things such as stocks and mutual funds.

This is a good collaboration between the government and Bukalapak as the marketplace can facilitate platforms for small businesses to grow. The tax amnesty initiative rolled out by the government will aim to strengthen the currency.

A version of this appeared in The Jakarta Globe on July 20. Read the full version here.