A statement by Finance Minister Bambang Brodjonegoro earlier this week was a shock to many
statement by Finance Minister Bambang Brodjonegoro earlier this week was a shock to many. The government's intention to deliberate a tax amnesty bill sounds absurd, if not impossible. The bill would allow financial crimes, from corruption and money laundering to tax evasion, to be exempted from all criminal and financial charges, in exchange for the beneficiaries repatriating their assets.
He explained that the amnesty bill would stand alone, separate from a bill on the revision of the 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 said, saw an opportunity to bring back some of the estimated thousands of trillions of rupiah of Indonesian assets, particularly in Singapore, and 'lock them here' to generate jobs and bolster economic activities.
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 move 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 'Jokowi' 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.
Although the idea seems noble, there are many questions being raised, particularly on the fairness and justice for those who earned their whopping wealth from corruption and money laundering.
Do we still believe that justice exists, if the government itself launches such an idea?
Will such a move help the government bring back the money?
We doubt it will. And we hope President Joko 'Jokowi' Widodo will have second thoughts before implementing this policy. There are so many what ifs and too many concerns that this policy may backfire. Instead of bringing back home the funds, Jokowi's administration could be accused of allowing corruption and therefore he will lose more trust from the people who voted for him.
Many feared the plan could potentially create a 'moral hazard'. Yustinus Prastowo, executive director for the Center for Indonesia Taxation Analysis (CITA), said that if the plan materializes, Indonesia would be the first to implement a tax amnesty that pardons politically sensitive crimes such as corruption and money laundering.
An economist from BNP Paribas, Philip McNicholas, warned about the risks of 'legitimizing corruption', which could 'damage the Jokowi administration's credibility and popularity and ultimately hurt the President's capacity to deliver on his reform agenda'.
Jokowi should remember that his constituents voted for him, believing that he would make badly needed changes ' but not at the cost of pardoning those who have evaded taxes and stole public money.
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Last Monday marked the 488th anniversary of Jakarta. Residents still echo the same gripes: the floods, worsening traffic jams, poor public transportation and crimes.
In his commemoration speech on Jakarta's anniversary, Governor Basuki 'Ahok' Tjahaja Purnama expressed hope that his administration would be able to bring prosperity to its residents and provide a humane city.
Notorious for his harsh remarks, Ahok has focused more on bureaucratic reform and good governance. Among his achievements is the implementation of electronic budgeting or e-budgeting, which only recognizes a limited number of officials who can access and make changes, making it almost impossible to tinker with the draft unsupervised.
His path as a governor has not been smooth, with the latest prolonged dispute between Ahok and city councilors on the governor's bold move to reveal mark-ups in the draft 2015 budget totaling Rp 12.1 trillion. Councilors have threatened to impeach him. However, instead of bowing down to the threat, Ahok enabled Jakartans to download the two versions of the draft budgets and scrutinize them for suspicious allocations.
Ahok acknowledges that he needs to work more to improve Jakarta as expected by the citizens. And we hope he controls his temper better, too.
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As Ramadhan has been going on for 10 days, Vice President Jusuf Kalla, who is also head of an agency for many of the country's mosques, has formed a team to take samples of noise from mosque speakers across the country. There are around 800,000 mosques in Indonesia but residents living near mosques have long complained of speakers being too loud.
The new group, set up earlier this month, had collected many samples and would report to Kalla, who planned to sit down with the top Muslim clerical body and Islamic organizations and seek to resolve the issue
Kalla's spokesman Husain Abdullah said that the group would try to avoid the 'war of the loudspeakers', especially in the wee hours of the morning prior to sahur (the pre-dawn meal).
Ramadhan will end in the next 20 days and hopefully we will hear fewer complaints during what is supposed to be a joyful, serene month.
' Primastuti Handayani
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