Indonesia: Finance Minister opens for second roll out of tax amnesty program

  • Finance Minister Sri Mulyani Indrawati is open to the idea of giving taxpayers a second chance to come clean about assets kept abroad amid calls from the public, particularly the business world, for a new tax amnesty.
  • The former World Bank managing director said she had been asked the same question by President Joko “Jokowi” Widodo.
  • However, she had yet to give a clear answer as to whether the program should be rolled out again, since she was concerned it would allow tax evaders to avoid compliance with government regulations.
  • She acknowledged that many taxpayers had hesitated to participate in the first tax amnesty from 2016 and 2017. Only about 1 million of an estimated 36 million taxpayers participated in the program.
  • “Since [the government] had been generous, the penalty had to be harsh. If [tax evaders] did not participate in those nine months we provided, we should punish them afterwards,” Sri said, adding that the penalty could reach 200% if taxpayers were found to have evaded taxes.
  • Sri said she believed the increasing calls from taxpayers for a second tax amnesty had emerged as soon as Indonesia implemented the Automatic Exchange of Information (AEoI) mechanism, which allows the government to trace taxpayer assets in any financial platform and institution, leaving them unable to swindle about their taxable assets.
  • She went on to say that the ministry would figure out solutions for upcoming tax policies so that every stakeholder, including businesspeople, could benefit from any government policies and take part in Indonesia’s economic development.

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