Tax amnesty aimed at huge funds hidden overseas


Tassia Sipahutar, The Jakarta Post, Jakarta | Headlines | Fri, February 06 2015, 8:23 AMThe government is hoping that the planned introduction of tax amnesty will bring home billions of dollars hidden by Indonesian companies and individuals overseas.

Finance Minister Bambang Brodjonegoro said the government hoped that the amnesty would encourage potential tax evaders to bring their funds back to Indonesia and report their wealth without being afraid of penalties.

“Yes, that [bringing back money] is also an objective. At the same time, it will hopefully extend our tax base,” he said on the sidelines of a meeting with Commission XI, which supervises finance, at the House of Representatives on Thursday.

He added that the government was working on the amnesty scheme so that it could be submitted to the House to be included on a list of priority bills this year. The government plans to revise the General Tax System (KUP) Law, which, along with other laws, will legalize the tax amnesty.

Bambang, however, declined to provide details on whether or not future amnesty recipients would be spared criminal charges or if they would just receive a waiver of administrative fines.

“We have not yet reached that stage and will discuss it in more detail. Please be patient,” he said, adding that they had not come up with a target for the quantity of overseas funds they hoped to bring home.

Deputy Finance Minister Mardiasmo previously said the government expected to begin implementing the amnesty in 2016.

The government is hoping that the tax amnesty will offer a specified amount of tax payments as a write-off of past undocumented or unreported wealth.

The government’s main objectives are to see a higher tax compliance ratio — up from 12 percent — and a higher tax revenue as individuals or corporations reenter Indonesia.

In 2015 alone, the ministry hopes to receive up to Rp 1.48 quadrillion (US$117.33 billion) in total tax revenues, a 28.7 percent increase from Rp 1.15 quadrillion last year.

Data from the ministry show there were around 30 million registered taxpayers by the end of 2014, but the ministry believes that the number should be much higher and that there are still a large number of unregistered taxpayers.

No official data is available on the amount of Indonesian funds kept overseas, but various estimates put the figure at roughly Rp 3 quadrillion.

Sofjan Wanandi, Indonesian Employers Association (Apindo) advisory board chairman, said Thursday that he hoped the tax amnesty would be included in the revised KUP Law.

“Businesspeople basically welcome the tax-amnesty plan, but the government really has to make sure that all legal matters are solved before the revision is implemented. We do not want to see illegal funds included in the write-off,” he said during a telephone interview.

Sofjan estimates that there is about $100 billion that could be brought back into the country with the tax amnesty.

Separately, the Center for Indonesia Taxation Analysis (CITA) executive director Yustinus Prastowo said that the government had lots of homework to do before actually implementing the tax amnesty scheme.

“It must have an excellent administrative system to cope with changes in tax records and it must have already established solid partnerships with other institutions, such as the National Police, the Attorney General’s Office and the KPK [Corruption Eradication Commission],” he said. –