W

ith the aim of boosting tax incomes and creating a multiplier effect on the economy, the government is looking to bring home billions of dollars in financial assets parked overseas by Indonesians with a game-changing policy: pardoning past financial crimes.

Finance Minister Bambang Brodjonegoro told The Jakarta Post on Sunday that a bill on a tax amnesty was expected to be deliberated as soon as this year. The bill would allow financial crimes, from corruption and money laundering to tax evasion, to be exempt from all criminal and financial charges, in exchange for the beneficiaries repatriating their assets.

'€œ[The new bill will cover] a pardon for general financial crimes ['€¦] including corruption, money laundering, et cetera,'€ he said. '€œWe need a broader scope of amnesty ['€¦] A mere tax amnesty will not be attractive.'€

According to Bambang, the amnesty bill will stand alone, separate from a bill on the revision of General Tax System (KUP) Law, which is set to be submitted to the House of Representatives for deliberation this month. The amnesty bill will be deliberated after the completion of the KUP revision.

The government, he explained, saw an opportunity to plough back some of the estimated thousands of trillions of rupiah of Indonesian assets, particularly in Singapore, and '€œlock them here'€ to generate jobs and bolster economic activities.

'€œA tax amnesty should not be seen simply as pardoning those who have made mistakes. It is time for Indonesia to put an end to capital flight. We need to bring capital back into [Indonesia],'€ Bambang said. '€œWe spend our time cursing corruptors, but they are safe in Singapore. It'€™s not fair. The one who benefits from their safety is not us but Singapore.'€

The idea of a tax amnesty has been in and out of public-policy debate for a decade. The 1998 political and economic crises caused many Indonesian conglomeration members to remove billions of dollars of financial assets overseas, mostly to Singapore. Quoting a study by McKinsey, Bambang estimated the amount of assets parked by Indonesians in Singapore alone at Rp 4 quadrillion (US$300 billion).

President Joko '€œJokowi'€ Widodo'€™s cash-strapped administration has the Herculean task of boosting tax revenues by 30 percent to realize large-scale infrastructure projects that are hoped to boost the economy by 7 percent by 2019, from 4.7 percent in the first quarter this year, the lowest level in six years.

Almost halfway through the year, however, tax takings have reached less than a third of the year'€™s target.

The House, which will deliberate the tax amnesty bill with the government to pass it into law, appears supportive of the plan.

Golkar politician Fadel Muhammad, who chairs House Commission XI overseeing financial affairs, said the House was looking forward to deliberating the bill with the government in the next sitting session, which will begin in August.

'€œThere has been no clear concept yet on the amnesty. But are fully behind the policy.'€

Meanwhile, Indonesian Democratic Party of Struggle (PDI-P) lawmaker Andreas Eddy Susetto, who is also a member of House Commission XI, said that it would be difficult to pass the bill before the end of this year, as it might face opposition from the public, law enforcement agencies and money-laundering watchdog.

'€œWill it be acceptable to set aside justice in exchange for higher tax income? More time is required to get everybody on the same page,'€ Andreas said.

Should the amnesty be approved, it will have a bigger scope than those introduced in 1984, when a full amnesty package was approved, and in 2008, when limited coverage under the so-called '€œsunset policy'€ was granted.

Asked if a similarly comprehensive amnesty had ever been successfully implemented, Bambang cited the experience of Italy, which used to enact regular amnesties to repatriate proceeds parked by organized-crime groups in Swiss banks.

'€œIn Italy, money from the mob can be repatriated. What'€™s important is that [our planned amnesty] can trigger a kind of national reconciliation to bring home our money,'€ he said.