Indonesia Intensifies Awareness Campaign on Tax Amnesty Program

TEMPO.CO, Jakarta - The Administration of President Joko Widodo (Jokowi) is racing against time to make its tax amnesty program a success, in order to increase the much needed state revenues.

Officially launched on July 1, the tax amnesty program is effective from July 18, 2016 until March 31, 2017.

The first period of its implementation is from July 18 until September 30, 2016; the second is from October 1 until December 31, 2016; and the third period is from January 1 until March 31, 2017.

The tax amnesty program has a specific period, therefore there should be no delay in its implementation, President Jokowi was quoted as saying by new Finance Minister Sri Mulyani Indrawati recently.

He particularly asked Finance Minister Sri Mulyani to complete all regulations on implementation of the tax amnesty.

Regulations on the tax amnesty must be completed soon, so the program could be carried out successfully, Minister Mulyani said at the presidential palace, here on July 28, after receiving a directive by the President on the tax amnesty for officials of the tax directorate general of the finance ministry.

The tax amnesty program is designed to be a significant incentive for taxpayers, since the compensation interest to be charged is only two percent, according to the minster.

"We are trying, during the period from now until September, to create trust building, convenience and, finally, success in developing a tax system," she said.

The president asked every tax officer to not only be ready and proactive in the implementation of the tax amnesty program, but also to secure the state revenue, in general.

For that purpose, tax officers should be honest, professional and have no conflicts of interest.

In his directives, President Jokowi said he believed that the momentum to carry out the tax amnesty is right at present, as the public has been enthusiastic in attending the tax amnesty education sessions that have been held.

The tax amnesty socialization activities have been well received, as the number of people attending the events were larger than those invited for the events, he explained.

"From three socialization activities that we have carried out, I have seen huge enthusiasm from the public and businessmen. In Surabaya, 2,000 people were invited, and 2,700 people came. In Medan, it was even more. 3,000 people were invited, and 3,500 people came to the event," the President said.

Jokowi is scheduled to carry out the tax amnesty sessions in Makassar, Jakarta, and even Singapore in the near future.

The Indonesian government has implemented a new tax amnesty program to boost tax revenues by encouraging the repatriation of funds stashed abroad.

The government will impose a two to five percent tax on assets repatriated to the country by March 2017.

These assets must be invested in Indonesia for a period of three years in funds managed by appointed banks and can be invested in several ways, including government bonds.

The government said many rich Indonesians have parked thousands of trillions rupiah abroad to evade tax.

At least Rp4,000 trillion of the fund are expected to be declared and Rp1,000 trillion of which would be repatriated and invested in the country.

When launching the tax amnesty program on July 1, Jokowi urged the countrys business community, whose members had so far been stashing assets overseas, to avail the government`s program.

"This is an opportunity that will not come again. Anyone who wishes to make use of it can go ahead and the rest should be prepared for the consequences," the President stated.

"So, we hope these funds are repatriated immediately. We will need Rp4,900 trillion in the next five years to develop infrastructure. The national budget can only provide Rp1,500 trillion and the rest must come from investment and businesses. There is no other alternative," he explained.

In the meantime, the Indonesian Police (Polri) will guarantee legal certainty and safety of tax amnesty applicants.

Polri is supporting the governments tax amnesty program and has helped maintain the investment climate by not disturbing activities of investors already in Indonesia, the Head of Polris Crime Investigation Department (Bareskrim), Commissioner General Ari Dono Sukmanto said on July 28.

The National Police is implementing the instructions of the President Joko Widodo and Law No. 11 Year 2016 on Tax Amnesty, to guarantee safety and legal certainty of the applicants, he added.

Detectives should focus not only on merely finding wrongdoings of tax payers, particularly tax amnesty applicants, he remarked.

Polri, in cooperation with several financial institutions, such as Indonesias Financial Services Authority (OJK), Bank Indonesias regional offices, and the Tax Directorate General, will issue appeals to businessmen and individuals, who have stashed their money overseas, to return their money to Indonesia and keep them in domestic banks.

"Polri will also guarantee the secrecy of data of tax payers applying for amnesty. Those who leak the data will be punished," he said.

Furthermore, State-owned bank PT Bank Rakyat Indonesia (BRI) has set a target to collect funds at least worth Rp60 trillion from the tax amnesty program, through both bank and non-bank products.

"The target would not be achieved without the dissemination of information that the BRI is ready to offer tax amnesty services to the clients and public, both in the country and overseas," PT BRI Director Sis Apik Wijayanto noted at an event to raise awareness on the tax amnesty program in Lampung, on July 28.

The BRI has disseminated information on its tax amnesty-related products and services across all its branches in the country.

In Lampung Province alone, 14 branches and 97 units of BRI are ready to offer tax amnesty services, he remarked.

The event was attended by 100 people, mostly businessmen from Lampung.

ANTARA