Potential Revenue from TaxAmnesty Could Reach Rp50tn:Tax Official

TEMPO.CO, Jakarta - Head of Large Taxpayer Directorate-General Regional Office Mekar Satria Utama estimated the potential revenue from large taxpayers in tax amnesty program would reach Rp50 trillion. The amount is excluding individual large taxpayers outside Jakarta.

“Large tax contribution will be 30 percent of total tax collection target, thus it also illustrates the amount in tax amnesty [program] of Rp165 [tax collection] target,” Mekar said in his office on Thursday.

Large taxpayers category is classified based on criteria of amounts of receivable, income and subsidiaries owned by individuals or the entity itself. Tax DG data shows that 1,200 corporate taxypares and 1,300 individual taxpayers are included in the category. The targeted revenue from large taxpayers this year is roughly Rp412 trillion, or 30 percent of the targeted Rp1,360.2 trillion in the 2016 state budget.

The government passed the tax amnesty bill in a plenary meeting of the House of Representatives on June 28. The policy will come into effect from July 1, 2016 to March 31, 2017. The targeted revenue from tax amnesty program in the revised 2016 state budget is Rp165 trillion.

The regulation will not only apply to large taxpayers, but also all taxpayers who already have or does not have tax identification number (NPWP), and those who have not report their income. The law stipulates that redemption rate for taxpayers who declare their onshore assets and repatriate their offshore wealth is 2 percent in the first three months, 3 percent in the following three months and 5 percent in the following three months.

Whereas taxpayers who only declare their offshore assets but not repatriate them will be subject to higher redemption rate of 4 percent in the first three months, 6 percent in the following three months and 10 percent in the following three months. Micro, small and medium-sized enterpresies owning assets between Rp4.8 billion and Rp10 billion will be subject to 5 percent tax rate. Whereas those owning above Rp10 billion assets will be subject to 2 percent rate.

Those who participate in tax amnesty program will not be subject to administrative and criminal sanctions. Moreover, taxpayers shall invest their wealth in government-appointed tax-payment bank (bank persepsi). Repatriated funds will be withheld on-shore for three years.

The government is aiming to secure biggest yield of tax amnesty from declared onshore assets. Mekar believed that Indonesian tycoons will take the opportunity. He also claimed that the redemption rate is relatively small compared to that of regular ones. “If the tax amnesty [program] runs well, we will find out how much our tax based [income] is,” he said.

Director General of Tax Ken Dwijugiastiadi said that revenue from tax amnesty will boost economic growth though it would take time. “In repatriation, there will be new subjects of taxation and taxpayers, it may then create investment to absorb workers,” he said. If the investment continues, Ken is optimistic that economic growth will improve.

Tax DG will disseminate the policy in 15 cities until end year. However, the government will not make any call on taxpayers to take the opportunity. “We are not enforcing the law. We would only show them the data instead, so it would persuade them to take [the opportunity],” he said.

Every participant in the program shall report real assets. If the Tax DG found any mismatch of asset data or discrepancy in unreported data, the taxpayer in question will be subject to income tax (PPh) and administrative sanction of 200 percent from underpayment of income tax.

Ken has assured that there will be strict confidentiality of data of tax amnesty participants. Moreover, the data will not be used for investigation and prosecution of tax crime and other crimes. “We will support [investigation process], but don’t use our data, please use the data from any other party.”

The Director for Information Technology Iwan Juniardi has prepared a designated app to monitor payment in the tax amnesty program. The data and tax revenue will be separated from other taxes. He has assured that the data will be encripted and will not be able to be accessed by the public. “Because it could be used for political purposes, people can defame each other, it’s dangerous,” he said.

PUTRI ADITYOWATI