Indonesia, the world champion tax amnesty

JAKARTA. Indonesia will book record as the country with the most successful tax amnesty program in the world, surpassing Italy. Previously, Italy was the most successful country in conducting tax amnesty in terms of the amount of assets declaration, assets repatriation, and redemption fees collected from the program.

As of the last date for the first phase of tax amnesty on 30 September 2016 at 9.40 pm, government has collected IDR97.1 trillion of tax amnesty revenues, while total amount of declared and repatriated assets amounted to IDR3.589 trillion and IDR136 trillion, respectively.

Cabinet Secretary Pramono Anung claimed that the realization of tax amnesty for the first period has exceeded expectations.

It is reported that Salim Group’s boss Fransiscus Welirang has declared and repatriated his assets.

President Joko Widodo said that the achievement reflects the high confidence of public and enterpreneurs to government, mainly in terms of taxation. “We use this momentum to conduct tax reform, strengthen tax basis, and increase tax rate”, said President.

Minister of Finance Sri Mulyani said that government now has important task to maintain taxpayers’ confidence that have joined tax amnesty. “We have task for maintaining public confidence by reforming law on taxation, as well as taxation institutions”, said Sri Mulyani.

However, participation rate of tax amnesty program in the second and third periods is expected to decline, on the grounds that government will apply higher redemption fees, which are ranging from 3% top 10% during the periods.

The tax amnesty program in the second and third periods will mainly target the segment of small and medium enterprises. Sri Mulyani said that government will continue to socialize this program to micro, small, and medium enterprises, as well as provide supports in terms of administrative procedures.

(Muhammad Farid/Translator)