T

he government is going all out to convince the public that it is ready to implement the recently endorsed Tax Amnesty Law.

It held a press conference at the Finance Ministry on Wednesday that seemingly conveyed its seriousness in dealing with the issue. A number of high-ranking officials were present, including Finance Minister Bambang Brodjonegoro, taxation director general Ken Dwijugiasteadi and Bank Indonesia (BI) deputy governor Perry Warjiyo.

Financial Services Authority (OJK) commissioner for capital market supervision Nurhaida, Indonesia Stock Exchange (IDX) president director Tito Sulistio and Indonesian Central Securities Depository (KSEI) president director Frederica Widyasari Dewi attended the press conference as well.

People looking to get information and applying for the amnesty can easily do so at any of the 341 tax offices across the country, where each office will have its own help desk. “Such a facility will be made available after the Idul Fitri holiday,” said Bambang.

The tax office has been preparing other facilities and infrastructure since January, as well as has provided easy access of information, Ken claimed.

Its website will feature a specific section on tax amnesty, where people can download online forms and scour its pool of tax amnesty materials. Twenty-four hour information will also be available on its hotline, known as Kring Pajak.

Ken said the tax office would not recruit additional personnel because the amnesty program carried a self-assessment scheme.

The government is optimistic the program — which was endorsed by the House of Representatives on Tuesday — will entice wealthy individuals to come clean with their undeclared assets, believed to be worth Rp 4 quadrillion (US$313.81 billion).

There will be a nine-month window of opportunity, until March 2017, for those individuals and small and medium enterprises (SMEs) to apply.

As much as Rp 1 quadrillion is expected to be brought back from overseas — most of which is estimated to come from neighbor Singapore — and be placed in various investment instruments. Among the instruments prepared are stocks, bonds, time deposits and savings.

Nurhaida said the OJK — in charge of both banking and capital market industries — had identified several regulations to support the program and was ready to adjust other regulations, while Tito claimed the IDX could easily accommodate the repatriated funds.

“The bourse can manage Rp 200 trillion monthly,” Tito said.

If all goes as planned, the government expects to receive at least
Rp 165 trillion in tax revenues from the program.

BI is optimistic and has joined the bandwagon as well. The central bank is preparing three instruments, in which amnesty participants can place their funds.

The first instrument will be related to its monetary operations, the second will be connected to the money market, while the last will be correlated to hedging activities.

BI estimates the inflows will bring a number of benefits to the country, such as improve the banking industry’s funding availability, strengthen the rupiah and bring inflation down.

As banks get their hands on the fresh funds, they can channel them into loans that stimulate the economy and boost growth to at least 5.3 percent in the fourth quarter. Meanwhile, loans can grow to around 12 percent from this year’s target of 10 percent and accelerate further to 16-17 percent next year.

Separately on Wednesday, state lender Bank Negara Indonesia (BNI) held an event in Singapore to familiarize potential amnesty participants with the scheme.

The limited event was attended by Indonesian Ambassador to Singapore Ngurah Swajaya, director general of financing and risk management Robert Pakpahan and Center for Indonesia Taxation Analysis (CITA) executive director Yustinus Prastowo.

Yustinus said that the majority of the 70 attendees expressed their wish to place their repatriated funds in their own Indonesian companies. “The government must come up with a solution for this.”