Investor Presentaiton

Tax Reform: Pursuing A Healthy And Fair Taxation System To anticipate social, economic and demographic dynamics and implementation of best-practices • CHALLENGE Anticipating medium to long term social economic dynamics Huge informal sector REFORM ASPECTS Administration Strengthening institution and human resources Policy Widening tax base and finding new source of revenue • • HEALTHY Effective as policy instrument Optimum and sustainable source of revenue Adaptive with transforms in economic structure . Limited tax base • Data and information are not optimal Aligning with international best practice Going Forward Administration simplification Strengthening monitoring function for extensification and intensifications Fair Law Enforcement Growing middle income class consumption increasing rapidly - consumption tax potentially to become main source of revenue. [Noted: currently, VAT is not optimum yet administration support is not optimum as there are lot of exemption] Improving VAT collection and reducing its regressivity Strengthening personal income tax policy Corporate Income Tax - tariff reduction - as an incentives instrument for business (industrialization and value-added creation) including various facilities, tax holiday, and tax allowance. • FAIR • Tax treatment certainty Encouraging taxpayer voluntary compliance Balancing tax burden between groups and between sectors Personal Income Tax - potentially become source of revenue from income tax, in line with improvement of data and administration, and increasing of income per capita. The PIT also could play as instrument for income redistribution, which is not optimum yet. Source: Ministry of Finance 12 79

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