JAKARTAGLOBE.BERITASATU.COM | 14 April 2016
Jakarta. In a hearing with the House of Representatives, academics suggested the government should push for a higher tax tariff in the tax amnesty bill to maximize government revenue.
The current bill charges a 1 to 3 percent tax tariff on taxpayers’ net wealth increase if they agree to bring their money back home or between 2 percent to 6 percent if they refuse to do so. The normal tax rate is 48 percent without the tax amnesty program.
“I think we should push it [the amnesty tariff] up to 5 to 10 percent. Also, we don’t need too many layered rates,” Yustinus Prastowo, executive director of Center for Indonesia Taxation Analysis, said.
Yustinus pointed out that a similar initiative in Italy in 2009 only managed to bring back home 20 percent of the 600 billion euros kept as offshore assets by Italians across the globe. The experience suggests that in order to get more revenue from offshore assets, governments must impose higher tax rates.
As Indonesia is also set to implement the Automatic Exchange of Information frameworks with tax havens by 2018, tax evaders will be left with little alternative but to accept the amnesty offer, he said.
“Taxpayers should take the amnesty offer. If they don’t, the government will go after them in the next two years. That’s how the government should bargain with them,” Yustinus said.
Yustinus, along with Anggito Abimanyu, state-owned lender Bank Rakyat Indonesia’s lead economist, and Hikmahanto Juwana, an international law professor at the University of Indonesia, shared their suggestions with House Commission XI — which oversees the financial and banking sector — on Wednesday (20/04).
Anggito Abimanyu echoed Yustinus’ comment. He said a 5 percent tariff is “just enough” to encourage taxpayers to join the program.
Ken Dwijugiasteadi, the director general of taxes, had previously addressed complaints that the current tariff was too low. He said the Finance Ministry should hold furthers discussions on the matter with different factions of the House.
“We’ll put that [the 5 to 10 percent tariff] under consideration,” he said on Tuesday.
Finance Minister Bambang Brodjonegoro said Indonesian offshore assets totaled around Rp 11,000 trillion, almost as much as the country’s total gross domestic product. He estimated the tax amnesty program could add up to Rp 114 trillion to government revenue this year.
Commission XI is conducting a series of hearings with experts, businesses and stakeholders on tax amnesty before continuing deliberation on the bill. A session with Bank Indonesia and the Financial Services Authority is scheduled for later this week.
As Indonesia is also set to implement the Automatic Exchange of Information frameworks with tax havens by 2018, tax evaders will be left with little alternative but to accept the amnesty offer, he said.
“Taxpayers should take the amnesty offer. If they don’t, the government will go after them in the next two years. That’s how the government should bargain with them,” Yustinus said.
Yustinus, along with Anggito Abimanyu, state-owned lender Bank Rakyat Indonesia’s lead economist, and Hikmahanto Juwana, an international law professor at the University of Indonesia, shared their suggestions with House Commission XI — which oversees the financial and banking sector — on Wednesday (20/04).
Anggito Abimanyu echoed Yustinus’ comment. He said a 5 percent tariff is “just enough” to encourage taxpayers to join the program.
Ken Dwijugiasteadi, the director general of taxes, had previously addressed complaints that the current tariff was too low. He said the Finance Ministry should hold furthers discussions on the matter with different factions of the House.
“We’ll put that [the 5 to 10 percent tariff] under consideration,” he said on Tuesday.
Finance Minister Bambang Brodjonegoro said Indonesian offshore assets totaled around Rp 11,000 trillion, almost as much as the country’s total gross domestic product. He estimated the tax amnesty program could add up to Rp 114 trillion to government revenue this year.
Commission XI is conducting a series of hearings with experts, businesses and stakeholders on tax amnesty before continuing deliberation on the bill. A session with Bank Indonesia and the Financial Services Authority is scheduled for later this week.
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