JAKARTAGLOBE | 13 Oktober 2015
Jakarta. Indonesia lacks suitable tax databases and infrastructure needed to implement a tax amnesty police, undermining plans to repatriate funds from abroad and expand the country’s tax base, a leading tax expert has warned.
The comments comes as the government and House of Representatives discuss a bill to pardon criminals — with the exception of drug offenders, graft convicts, human traffickers and terrorists — if funds are repatriated from aboard to Indonesia under terms outlined by the bill.
“[Tax amnesty] needs data that is relatively close to the truth. Without it, we can’t guarantee that this will work and significantly contribute to out economy,” Yustinus Prastowo, executive director at Center for Indonesia Taxation Analysis, said on Monday.
“All we had was a promise [from taxpayers], but we can’t collect it.”
The government estimates up to Rp 4,000 trillion ($220 billion) has been stashed abroad by Indonesian criminals and tax offenders. Under the proposed bill, the government will offer legal pardons to criminals willing to return their funds to Indonesia with a percentage paid to the government.
Yustinus said that not only is data still incomplete, the government doesn’t currently have adequate infrastructure to support a massive tax report while simultaneously monitoring and prosecuting taxpayers who incorrectly report their data.
Director general of the Finance Ministry’s taxation office Sigit Priadi Pramudito in May said that the ministry does not have a strong and comprehensive database which could maximize and increase tax revenue.
Still, Firman Soebagyo, deputy chairman of the House’s legislative body, is bullish that the bill, once authorized, will become a legal framework for tax amnesty to boost the tax revenue.
“We should put our trust in the government. I think they [could get] the data,” said Firman.
“We have learnt from the [2008] sunset policy that taxpayers reluctantly report their assets due to the lack of incentives … This time, when the taxpayers enter our system through tax amnesty, their data will be online,” Firman said.
The House and the government are still discussing how much the taxpayers should pay to the country, Firman said, as well as penalties for offenders who conceals their assets abroad.
The government has collected just 53 percent of its Rp 1,294 trillion tax revenue target this year, citing low commodity prices and weak economic growth. The 2016 state budget targets tax revenue at Rp 1,369 trillion.
