Indonesia's tax amnesty program, which was launched in July 2016 and will run until 31 March 2017, can be labeled a success. Up to 16 October 2016, a total of IDR 3,842.9 trillion (approx. USD $296 billion) worth of assets (either at home or abroad) have been declared to Indonesia's tax authorities nearly achieving the government's target of IDR 4,000 trillion. However, asset repatriations (from the so-called tax havens) are not a success, being far from the government's initial projection and therefore Indonesian authorities are now easing regulations.

Read more ›

The first phase of Indonesia's tax amnesty program ended on Friday (30/09). Contrary to earlier forecasts the first phase of the program can be labeled a success. The Indonesian government collected IDR 97.2 trillion (approx. USD $7.5 billion) in additional tax revenue, or 58.9 percent of the nine-month program's full target (IDR 165 trillion). Indonesia's tax amnesty program, which runs up to 31 March 2017, is divided in three phases. In the first phase the government offered the most attractive tax tariffs to taxpayers who declare and/or repatriate their previously unreported assets.

Read more ›

Contrary to our earlier predictions, Indonesia's tax amnesty program has been on a roll in September 2016. The program is designed to boost the government's tax revenue by offering tax evaders attractive rates to come clean and declare their previously undeclared assets (whether stashed at home or abroad in the so-called tax havens). Those who join the program can also repatriate offshore assets into Indonesia, into specifically prepared investment instruments where the funds need to stay for at least three years.

Read more ›

Realization of non-oil & gas tax revenue reached IDR 705 trillion (approx. USD $54 billion) up to 26 September 2016, or 53.5 percent of the full-year non-oil & gas revenue target that was set in the Revised 2016 State Budget (IDR 1,318.9 trillion). Ken Dwijugiasteadi, the Finance Ministry’s Taxation Director General, said bleak non-oil & gas tax revenue realization is partly the result of lower income tax and value-added tax realization generated from imports. Both Indonesia's import and export performance have been declining for nearly two years.

Read more ›

According to reports in Indonesian media, President Joko Widodo is willing to extend the deadline for the first phase of the government's tax amnesty program. Originally, this first phase, which sets the most attractive tax rates for those who decide to declare previously undeclared assets and - if desired - repatriate their offshore assets into Indonesia, was designed to end on 30 September 2016. Rosan Roslani, Chairman of Indonesia's Chamber of Commerce and Industry (Kadin Indonesia), said Widodo is willing to extend the deadline on request of Indonesia's business community.

Read more ›

Indonesian Finance Minister Sri Mulyani Indrawati was at a court hearing in Jakarta on Tuesday (20/09) to defend the legality of the nation's tax amnesty program. In July 2016 legal activists, gathered within the One Justice Foundation (Yayasan Satu Keadilan) and Indonesian People's Struggle Union (Serikat Perjuangan Rakyat Indonesia), filed for a judicial review at the Constitutional Court claiming that the program turns money laundering into a legal practice, protects criminals, teaches Indonesian citizens not to pay taxes, and constitutes an unfair program from a social point of view.

Read more ›

The first period of Indonesia’s tax amnesty program is almost completed. This first period, which runs from July to 31 September 2016, offers the most attractive tax rates to those taxpayers who have not fulfilled their tax obligations in recent years. Through the government’s tax amnesty program they can declare previously undeclared assets and – if they have assets abroad (for example in the so-called tax havens) – they are encouraged to repatriate these funds into Indonesia through attractive tax incentives and immunity from prosecution, a move that met resistance in Singapore.

Read more ›

The governor of Indonesia's central bank (Bank Indonesia), Agus Martowardojo, stated that he has become highly skeptical about the government's tax amnesty program that was launched in July. At a parliamentary hearing on Wednesday (07/09), Martowardojo said the central bank only expects to see IDR 21 billion (approx. USD $1.6 billion) in additional tax revenue through the amnesty program for the state and only USD $13.8 billion in repatriated funds. These new projections are significantly below the central bank's earlier projections.

Read more ›

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.

Read more ›

The ambitious tax amnesty program of the Indonesian government received support from three influential Indonesian businessmen. The first, James Riady, Chief Executive of the Lippo Group (and son of Mochtar Riady, the founding father of this huge conglomerate), joined the program by handing over his tax declaration documents to Indonesia's Tax Office on Friday (02/09). This declaration took place in front of an audience consisting of Indonesian press and therefore may cause some momentum for the controversial program that experienced a sloppy start.

Read more ›

In the first month of 2022, we detected some positive signs, both abroad and at home (in Indonesia) as there is growing evidence that the Omicron variant is encouraging strong herd immunity around the world, while not making too many people ill to the extent that they require hospitalization.

Read more ›

The COVID-19 pandemic made governments around the world impose severe social and business restrictions, thus contributing heavily to the unprecedented decline in economic activity. To maintain society’s support, governments subsequently had to spend heavily on social assistance, soft loans, and various fiscal incentives to keep most businesses alive and allow poorer segments of society to have enough to eat.

Read more ›

It is something the central government of Indonesia has been planning and weighing for several years now, but the coronavirus (COVID-19) crisis seems to have sped up the efforts. Per 1 July 2020, the Indonesian government imposes a 10 percent value-added tax (VAT) on sales of imported digital products and services.

Read more ›

E-commerce – which refers to the activity of electronically buying (or selling) products through online services or over the Internet – has been developing rapidly in Indonesia over the past decade. More and more Indonesians have started to shop online, forcing many offline retail players to adapt and innovate their business models in order to survive in this new and challenging environment where two newcomers, both tech startups and both e-commerce platforms, have developed into a unicorn (Tokopedia and Bukalapak) which is a startup that is valued above USD $1 billion.

Read more ›

It came as a big surprise to us. Only three days before the new and somewhat controversial e-commerce tax regulation would come into effect, Indonesia’s Finance Ministry decided to delay its execution.

Read more ›

More and more processes are being shifted online as this, generally, allows processes to become more efficient and easier to complete. This also applies to Indonesia's tax office. Over the past couple of years, tax can be filed online by legal entities and individuals. However, before an individual of company can file the tax online, he - or it - first needs to obtain an Electronic Filing Identification Number (EFIN).

Read more ›

Tax is not everybody’s favourite topic of conversation. Nonetheless, it is a crucial subject both for the legal entity and the individual as various taxes need to be filed to authorities. Trying to escape from paying (higher) taxes is a risky affair and can lead to serious sanctions. Similarly, innocent mistakes can also cause problems with tax officials and therefore is it advised to invest some time in understanding the tax system. This advice particularly applies to those who move to different jurisdictions – to work and/or live - as tax regulations may not be the same as the regulations in their home country.

Read more ›

While reforms related to Indonesia’s corporate income tax rates remain in the planning stage, there is a new important regulation that will come into effect per 1 April 2019. Through Finance Ministry Regulation No. 210/PMK.010/2018 on the Taxation of Trade Transactions through Electronic System or E-commerce, which was signed on 31 December 2018, Indonesia will require e-commerce merchants (sellers) to share data with tax authorities and pay VAT and income taxes.

Read more ›

Investors are awaiting a series of fiscal incentives from the Indonesian government, including a new tax holiday. Meanwhile, investors also urge the government to improve the investment and business climate by simplifying the process and procedures to obtain permits for investment projects. This also includes improving the coordination between central and regional authorities, for example through the integration of the permitting process at both levels.

Read more ›

Indonesia's Directorate General of Taxes claims that tax revenue realization in Indonesia will grow by a double-digit figure (on a year-on-year basis) in January 2018. This result comes on the back of strengthening commodity prices that bring in more tax money for the government.

Read more ›