Optimal Corporate Income Tax Policy for Large Developing Countries in an Integrated Economy

This paper produces recommendations of policies relevant to Indonesia being a developing country with great tax bases. These recommendations comprise a reassessment of Corporate Income Tax policies which carry the risks of reducing national economic welfare, applying differentiation on imposing fundamental of Corporate Income Tax in the efforts of providing incentives to foreign investment, imposing tax incentives, establishing an onshore financial center within certain restrictions which do not trigger tax evasion practices, attempting the establishment of cross-countries tax coordination and synchronizing monetary policies on Corporate Income Tax.