Govt Should Reform Taxation System Before Amnesty: Researcher

Jakarta. Despite passing the House of Representatives recently, the tax amnesty is continuing to divide the political and economic community who argue the benefits may not outweigh the drawbacks.

While lawmakers have said the program will bring billions in funds back to the country, but some activists and pundits have argued the oddities within the regulation suggests it favors those of who done wrong.

“People are confident in the tax amnesty, but it actually shows the government is not credible in generating a tax income,” Wiratama Institute researcher Muhammad Syarif Hidayatullah told the Jakarta Globe on Saturday (02/07).

The tax amnesty program is hoped to bridge the budget deficit — 2.48 percent of gross domestic product or Rp 313 trillion ($23.8 billion) — this financial year.

“The deficit is caused by the government missing the tax income target,” Syarif said.

“I’m not sure about tax amnesty, because the taxation structure should be reformed first otherwise the government would lose to lower tariffs,” Syarif said.

If Indonesia’s taxation system was already mature, the government would have more bargaining power against tax dodgers, he argued.

“Now, Indonesia is only placing a 2 to 10 percent tariff [from tax dodgers], which is very cheap compared to the real penalty of 35 percent regulated in taxation law.”

The country is expected to join the Automatic Exchange of Information in 2018, a joint international effort to access financial data.

“With AEOI we can detect tax dodgers and easily identify money abroad. Why don’t we wait until 2018, while reforming our tax first?” Syraif said.

Earlier, President Joko “Jokowi” Widodo clarified the amnesty is not designed to excuse corruptors and urged the government to strengthen the infrastructure budget.



Kategori:Tax Amnesty in English

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