26March2017

Home Editorial The last period of Tax Amnesty

The last period of Tax Amnesty

The period of reporting the wealth in the form of tax amnesty program will end March 31st, 2017. This is in accordance with the tax amnesty regulation which has been applied since July 1st and will end March 31st, 2017. For the government of Indonesia, the tax amnesty program is very important. Thus, President Joko Widodo visited a number of cities to disseminate the program. On Tuesday, February 28, 2017, the President called on all of society, including employers to immediately complete reporting their assets in the tax amnesty program.

The government is targeting redemption from the tax amnesty program amounting to Rp 165 trillion, with the fund repatriated from abroad reaching Rp 1.000 trillion and the fund declared amounting to Rp 4.000 trillion, both domestically and abroad. With the repatriation fund which has been kept abroad, the tariff of redemption on the final period from January 1st March 31st 2017 is 5%. As for the declared or reported fund is 0%.

If any taxpayers who do not follow the tax amnesty and the data found on the taxpayers’ wealth which was gained during the period January 1st, 1985 – 31st December 2015 and this has not been reported in the letter of notification tax (SPT), it is considered as additional income and taxed and sanctioned. The government will also apply maximum penalty against taxpayers who disobey their obligation such as fining 2% per month or 48% for 2 years.

The tax amnesty itself is the elimination of tax which is owed, not subject to administrative sanctions and criminal sanctions in the taxation. The tax amnesty is a breakthrough policy with benefits and higher economic growth, the expansion of valid, comprehensive and integrated data base of taxation and increase of state tax revenue. For Indonesia, the achievement of the tax amnesty is one of the best programs compared to other countries that have implemented similar programs such as Chile and India.

President Joko Widodo in the near future will issue Regulation in Lieu of Law (decree) on access of information among countries in the world for the purpose of taxation. The information access has been agreed and signed by most countries in the world. This is aimed at preventing every country’s citizens who commit tax evasion by investing their assets abroad.

This regulation will be brought to the G-20 meeting in Hamburg, Germany on July 7, 2017. By starting the implementation of the decree on June 2018, all countries can gain access to information on various matters relating to taxation, including the assets of Indonesian citizens in abroad. Anyone could no longer hide his or her wealth within the country and abroad. As a result, the taxpayers can no longer avoid paying their tax. So, each country is waited to implement the agreement.

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