Consumers in Indonesia will no longer have to pay tax on luxury items including branded goods, in a government move to boost spending.

However, companies will be required to pay 10% of the price as income tax, compared with 7.5% previously.

Finance minister Bambang Brodjonegoro said: "We want to push up people's purchasing power and spur industrial growth. We also want to reduce people's tendency to buy goods abroad."

Buyers of branded goods such as shoes and leather bags will no longer be required to pay luxury tax, but will still have to pay VAT.

The luxury tax was previously up to 75%. It still applies to some cars, yachts, alcoholic drinks and large properties.

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