SECOND-PERIOD TAX AMNESTY PROGRAM TO TARGET SMEs, PROFESSIONALS by Fardah

Jakarta, Oct 19, 2016  (Antara) - The second phase of the tax amnesty program that began on October 1 and will last till December 31, 2016, offers a redemption tariff of three percent.

         This is slightly higher than the two percent tariff offered during the first phase from July 18-September 30, but less than five percent that will be imposed during the third phase (January 1 to March 31, 2017).

             A total of 405,405  tax payers declared their assets with redemption payments totaling Rp93,49 trillion and the declared assets reaching Rp3,826.81 trillion as of Oct. 12.

        Of the total redemption funds accrued, most came from individual tax payers, numbering 321,893. Redemption funds reached Rp83 trillion (88.78 percent) and assets declaration reached Rp3,322.26 trillion.

         The number of corporate tax payers reached 83,512 with total redemption funds reaching Rp10.49 trillion (11.22 percent) and declared assets reaching Rp504.55 trillion.

          The first phase was considered successful compared to similar programs carried out by several other countries.

          At present, the Finance Ministry, particularly the Tax Directorate General, will identify professionals who can potentially participate in the current tax amnesty program.   
     Nine categories of professionals have so far been identified as potential participants in the tax amnesty plan, including doctors, tax consultants, lawyers, architects, accountants, notary public, appraisers, provincial governors and deputy governors, commissioners and directors of board of state-owned companies.  

    The idea to map potential tax payers so that they can participate in the tax amnesty program was intended to expand the tax base and enhance awareness to pay taxes as an obligation.

          "I am doing it not because I want to pass a judgment that all (of the professionals) must pay up but the tax amnesty law does provide a new facility for them to declare their assets and ensure compliance. To me, that is very important," Finance Minister Sri Mulyani explained.

         According to the data of the Directorate General of Law and General Administration of the Ministry of Law and Human Rights, the number of notary public tax payers in Indonesia is 14,685 but only 11,314 have tax identification numbers (NPWP) and of them only 3,186 participated in the tax amnesty program.

        Of the 106,495 doctors, only 23,310 have NPWP and only 2,172 participated in the tax amnesty program.

         The minister gave special attention to consultants and accountants because they are supposed to play a role in inviting people to abide by tax regulations.

        Of the 3,333 consultants in Indonesia, only 1,408 participated in the tax amnesty program while of the 10,218 accountants, only 752 have NPWP and 105 participated in the amnesty program.    
     "I am not saying that the rest must take part in the program but I consider them as very potential candidates for amnesty program," Minister Indrawati said.

         Apart from these nine categories of professionals, the Finance Minister has also asked the civil servants in the third echelon as well as university lecturers and professors to be included.

          Besides, Sri Mulyani also encouraged micro, small and medium enterprises (SMEs) to take part in the second phase of the tax amnesty program. 
    Towards that end, she has communicated with various professional associations, including the Association of Indonesian Employers (Apindo) and the Indonesian Chamber of Commerce and Industry (Kadin) as well as the Association of Indonesian Engineers, to help familiarize them with the tax amnesty program.

         In the meantime, President Joko Widodo (Jokowi) has said the government is seeking to build public trust through a number of laws related to taxes such as tax amnesty or revisions of laws on income tax (PPH) and value added tax (VAT).

          The policy is part of the government's tax reform program so that the people trust the state more when it comes to managing funds accrued through taxes and ensure development in the state.

          "The most important thing we want to build is trust. It is only on the basis of public trust that we could carry out development. People need to trust that we would use the money received from the tax payers properly for national development," Jokowi underlined in an interview with Antara on Oct. 14.

         The government's nine-month tax amnesty program had set a target to receive redemption funds worth Rp165 trillion, declared funds of Rp4 thousand trillion, and repatriated funds of Rp1 thousand trillion. 
   The program is expected to increase tax revenues to help finance infrastructure development programs, and to strengthen the country's tax data base in long term.     
    The government has warned, that in 2018, it would no longer be possible for tax payers to hide assets to evade paying taxes, as Indonesia would become part of an international system of transparency.      
    Once the program concludes, failure to pay taxes or tax evasion would invite legal consequences. ***3***
     (f001/INE)
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(T.F001/A/BESSR/A. Abdussalam) 19-10-2016 23:22:23