D

espite criticism from the Financial Transaction Reports and Analysis Centre (PPATK) and Corruption Eradication Commission (KPK), President Joko '€œJokowi'€ Widodo'€™s administration has insisted that it will go ahead with its implementation of a tax amnesty for financial criminals by the end of the year to help right the staggering economy.

Vice President Jusuf Kalla said that the speedy implementation of the controversial policy aimed at seeking financial resources to compensate the government'€™s failure to collect a targeted Rp 200 trillion from registered taxpayers this year.

The government is hoping to coax offenders, including perpetrators of money laundering, embezzlement and tax evasion, to bring home their assets parked abroad, including around Rp 4 quadrillion in Singapore alone, in exchange for clearing them of legal charges, in the hope of getting a 10 to 15 percent slice of the would-be repatriated assets to help build the economy.

'€œIf not by the end of the year, then [the amnesty] will be implemented in the first few months of next year. The government will take the draft proposal to the House of Representatives, where it could be integrated with the existing draft revision of the general provisions and procedures of taxation bill,'€ Kalla said as quoted by kompas.com.

Kalla defended the tax pardon plan, arguing that it was not an innovation of Jokowi'€™s administration but a continuation of a policy begun by the preceding government.

The government is stepping up efforts to finalize the draft bill before sending it to the House for deliberation.

The PPATK has warned that instead of helping the economy, an amnesty would engender greater numbers of violators, while the KPK argues that it would constitute a legal discrimination against financial violators who have been convicted and their assets seized by the courts.

Transparency International Indonesia (TII) has also criticized the plan, saying that the government would do better to repair flaws in the country'€™s investment system, which is still plagued by corruption, in order to attract new investment to bolster the economy.

TII secretary-general Dadang Trisasongko said that a study conducted by the NGO showed that bribery practices in permit issuance processes could account for 15 to 30 percent of the total production cost, a situation discouraging foreign investment in Indonesia.

'€œThe tax amnesty has more to do with the already existing business in Indonesia, and nothing to do with encouraging new investment to be brought to Indonesia to help the economy,'€ Dadang told The Jakarta Post on Sunday.

He added, however, that an amnesty could have positive effects on tax receipts if financial criminals became obedient taxpayers after receiving a government pardon, and only in a system that is fully transparent, it would be vulnerable to great abuse.