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Heightened tax amnesty promotion needed to prevent noncompliance
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Tax officers welcome taxpayers at Tulungagung tax office, East Java on March 31. The government is being urged to step up publicity campaigns for the tax amnesty policy to avoid public misunderstanding and noncompliance amid the heated debate over the low penalties to be given to tax evaders who join the program. (ANTARA FOTO/Destyan Sujarwoko)
T
he government is being urged to step up publicity campaigns for the tax amnesty policy to avoid public misunderstanding and noncompliance amid the heated debate over the low penalties to be given to tax evaders who join the program.
Tax expert Darussalam said the tax amnesty bill gave the country a chance to improve the taxation system for sustainable tax revenue in the long term. He criticized the dispute over alleged injustices in the bill as ‘going too far from its substance’.
“The debate on the unjust aspects of the tax amnesty policy will take us nowhere. Let us not get stuck on the debate over the penalty as there is no absolute fairness in taxation,” he stated on Monday in Jakarta.
Some might say that the proposed tax amnesty penalty of between 2 percent to 6 percent was too low, he continued, but even if the penalty was raised to 10 percent, people would still question it as the current income tax rate was 25 percent.
“There is no absolute justice in tax. An argument about unjust aspects of the tax amnesty is not relevant. When Adam Smith was told to choose between justice and legal certainty in tax, he picked legal certainty, as justice that lacks legal certainty is another type of injustice,” he said.
Golkar politician Bambang Soesatyo said the tax amnesty policy might lead to a widespread taxpayer noncompliance. Without a proper promotional campaign, he said, many compliant taxpayers could be upset to see tax evaders awarded with the tax amnesty.
“They will tend to refuse or delay their income tax payment as they know the government will pardon defiant taxpayers as stipulated in the bill,” he said as quoted by tribunnews.com.
According to the problem inventory list (DIM), a part of the bill deliberation process that aims to get feedback on the bill from all factions of the House of Representatives, there were several main issues in the bill.
The Indonesian Democratic Party of Struggle (PDI-P) urged the House to change the name of the bill to Asset Declaration and Repatriation bill, and also highlighted the problem of the low, “unfair” penalties for tax evaders.
Some House members proposed that the duration of the policy be extended from 2016 to 2018, and some urged the government to mandate that repatriated assets be invested in small, medium enterprises (SME), instead of the money market.
In general, Darussalam said he supported the bill being passed into law, as it would allow the tax office to ask for data from the banking industry for tax purposes. “It will be very important for monitoring taxpayer compliance,” he said. (ags)
