JAKARTA — Indonesian President Joko “Jokowi” Widodo yesterday urged citizens to take part in the country’s new tax amnesty and pledged that his government will “go all out” to keep the law behind it from potentially getting blocked in court, after a slow start to the programme aimed at drawing back billions in assets abroad.
“We want this tax amnesty to be successful,” the president told an audience in Jakarta that includes business executives. “I know now many are still doing their calculation, but, in time, I believe at the third or fourth week of August, or early September, there will be a lot of inflow.”
At Indonesia’s Constitutional Court, legal activists last month filed a request for judicial review of the law, contending that it protects money launders and tax evaders.
The court, at a preliminary hearing last week, told the applicants to revise their filed request, which it said lacked argument about the constitutional damage from the law. They were given until Aug 9 to submit a revised request.
Mr Widodo, without elaborating, said the government “will go all out so the Constitutional Court will uphold the tax amnesty law”. The president said it was important for the amnesty to work.
“We have to realise that when there’s inflow, we will have a big room to develop this nation,” he said.
In line with low payment rates in a law passed in June, the government hopes that by March 2017, Indonesians will bring home billions of dollars parked outside the country.
The tax amnesty programme was initiated by Mr Widodo’s government to cover a big shortfall in budget revenue and to widen Indonesia’s small tax base. The sooner people declare their assets, the lower rates they will pay.
The law, which kicked in on July 18, grants special personal income tax rates to tax evaders who declare their past earnings between this month and next March.
People and companies that declare their earnings and pay the special taxes will not be penalised for having failed to declare them before.
The law also forbids the state from using tax information as initial proof for launching criminal investigations against errant taxpayers. It prohibits law enforcers from obtaining taxpayers’ tax records, except with the taxpayers’ consent.
Law enforcers must look for proof elsewhere to catch tax evaders.
National Police Chief General Tito Karnavian said he instructed officers not to use information garnered from the programme to launch investigations against taxpayers.
“The police need to assist and ease the way for tax officers and taxpayers in their efforts to declare or repatriate assets,” Gen Tito said yesterday. “The police also need to ensure a safe investment environment so that it is convenient for taxpayers to invest here.”
Finance Minister Sri Mulyani Indrawati, who was reappointed to the post last Wednesday in a Cabinet reshuffle by Mr Widodo, had said law enforcers need to understand that any disruption to the government’s tax amnesty programme could pose a risk to the country and to its economic recovery.
Despite the government’s encouragement, only 1.8 trillion rupiah (S$185 million) in assets were declared by 292 taxpayers in the first two weeks of the programme.
The government hopes to draw about 165 trillion rupiah from the programme. Indonesia, a country of more than 250 million people, has only about 30 million registered taxpayers.
The slow start was attributed to many tax offices unable to provide detailed information on the programme as well as seamless services to prospective taxpayers.
However, tax directorate-general spokesman Hestu Yoga was confident that tax collection would only pick up from here.
“The main point is that we ensure confidence and convenience for the participating taxpayers,” Mr Hestu said. “After all, they do not have many choices left with banking data openness coming in 2018, which will make it hard for anyone to hide their assets.”
Sumber : todayonline.com
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