A total of 62 "big taxpayers" have joined Indonesia's tax amnesty program. According to local media their participation has resulted in a total of IDR 41.2 trillion (approx. USD $3.1 billion) worth of fund declarations and IDR 902 billion (approx. USD $68 million) in additional state revenue (tax). Meanwhile, the Tax Directorate General said there are more big Indonesian taxpayers ready to join the program. The tax office has formed a special team that calls the country's large businessmen on a daily basis to remind them about the tax amnesty program and their tax obligations.
However, Mekar Satria Utama, Tax Directorate General Spokesman, said he cannot reveal the names of those big taxpayers in Indonesia who have joined Indonesia's tax amnesty program. The public can only know their names in case the big taxpayers themselves publicly announce their participation in the program.
Over the past week a number of big Indonesian businessmen announced to have fulfilled their tax obligations through the amnesty program. These were James Riady (Chief Executive of the Lippo Group), Anindya Bakrie (Bakrie Group), Dato Dri Tahir (founder of Bank Mayapada International) and Sofjan Wanandi (owner of the Gemala Group as well as chief advisor of Vice President Jusuf Kalla). Together these men can cause the repatriation of trillions of rupiah into Indonesia. Moreover, their statements and support for the tax amnesty program are expected to motivate other big taxpayers to take similar steps.
In fact, it constitutes good publicity for the groups as they can claim that they are "pro-Indonesia" by fulfilling their tax obligations and repatriate funds into the special investment instruments that were prepared by the government and financial authorities (in order to absorb excessive liquidity in case the program would be a huge success). It will be quickly forgotten that these businessmen and groups hid part of their assets abroad for so many years in order to avoid paying higher taxes.
Based on official data from Indonesia's tax office, additional state income from the tax amnesty program reached a total of IDR 5.28 trillion by Tuesday (06/09), or 3.2 percent of the target that was set by the government (IDR 165 trillion). Meanwhile, fund repatriations into Indonesia reached IDR 13.9 trillion, or 1.4 percent of the government target (IDR 1,000 trillion). The tax amnesty program of Indonesia is a 9-month program running from July 2016 to 31 March 2017.
Tax Amnesty Program Indonesia - Score So Far:
(in IDR trillion)
|Per 06 Sep '16
(in IDR trillion)
|Declaration of Funds||4,000.0||232.1||5.8%|
|Repatriation of Funds||1,000.0||13.9||1.4%|
Regarding the foreign asset declarations and fund repatriations, most of these funds originate from Singapore, followed by Australia, Switzerland, USA, and the British Virgin Islands.
Origin of Foreign Asset Declarations and Repatriations:
(in IDR billion)
(in IDR billion)
|British Virgin Islands||927.0||32.6|
Source: Investor Daily
Meanwhile, Ken Dwijugiasteadi, Director-General of Taxation at Indonesia's Finance Ministry, said the tax amnesty program has managed to boost the number of registered taxpayers in Indonesia. A total of 1,591 new taxpayers were registered since the start of the program in July 2016.
Although the nation's tax amnesty program experienced a disappointing start, Indonesian authorities are optimistic that the peak in tax declarations and repatriations will arrive shortly, especially now several big businessmen have put their support behind the program. However, results of our poll show that opinions about the success of the program are divided.
Poll Indonesia Investments:
Do you think that Indonesia's tax amnesty program will be a success?
Voting possible: -
- Yes, I do (50.6%)
- No, I don't (32.8%)
- I don't know (16.6%)
Total amount of votes: 2421