In conjunction with the end of the last period of tax amnesty on March 31, President Joko Widodo gave a final warning to the public.
The President reminded people to take advantage of the amnesty. The President and other officials also reminded that taxpayers who failed to take advantage of this momentum would be pursued by the tax authorities, particularly with the immediate issuance of the government regulation in lieu of law (Perppu) related to the disclosure of banking customer data in the near future.
With this regulation, it will become possible for the tax authorities to access the data of taxpayers implicated in taxation crimes. The Perppu itself will be issued as a part of the Indonesia’s obligation for global cooperation in the Automatic Exchange of Information (AEoI) framework, which involves hundreds of countries around the world and will come into effect in 2018. Countries not taking part in AEoI will be ostracized and included on a taxation blacklist.
Cooperation in exchanging financial information and the possibility for the government to access taxpayers’ data for taxation purposes will place taxpayers in a position where they will not be able to hide their assets, including in tax havens.
Taxpayers will also be no longer able to hide behind bank secrecy, as previously, because the cooperation will be binding on banks worldwide.
The National Police chief, Indonesian Military (TNI) commander and Attorney General have expressed their commitment to help track taxpayers\' unreported asset data. The regulation will be issued after the tax amnesty ends, by the end of March 2017.
It would be appropriate for the public to welcome the government’s invitation. In addition, participation in the amnesty will save them from being targeted by international tax officials with the help of the authorities; this is an opportunity for taxpayers to be involved in a variety of investment projects that are now being widely presented by the government. Participation in the amnesty is also a form of goodwill and responsibility by taxpayers to help build the country\'s economy.
As of the end of February 2017, according to Finance Minister Sri Mulyani, there were 682,822 individual taxpayers and business entities participating in the program. Total assets declared totaled Rp 4,414 trillion, with penalty payments reaching Rp 112 trillion. The amount of assets declared is equivalent to 34.4 percent of GDP, the highest amount compared to other countries, and is proof of the success of this program.
Apart from the success of the tax amnesty in the Jokowi-JK era and the recognition that this success will serve as an initial solid foothold for taxation reform, there are still many notes to be made regarding the implementation of the current amnesty. Among these are the slip in repatriation figures, which have been far below target, and the low addition of new taxpayers.
Penalty payments of Rp 112 trillion are far below the estimated value of liquid assets owned by Indonesian citizens overseas, which amount to Rp 700 trillion. Meanwhile, the low number of new taxpayers has been caused by a low level of participation in the amnesty, which so far has reached only about 15 percent.