Tax office spokesperson Hestu Yoga Saksama said the tax authority was unsatisfied with the result of the program’s first phase, which ended on Sept. 30 and signed up only 420,000 participants, equal to 2 percent of the country’s 20 million registered individual taxpayers.

Data at the Finance Ministry’s Directorate General of Taxation show there were more than 15,700 new registered taxpayers since Jan. 1, with roughly about 12,800 coming from the amnesty program.

Taxpayers participating in the first phase of amnesty made redemption payments worth a total of Rp 94.5 trillion (US$7.23 billion), the data show.

“We are pleased [with the first phase], but we can only be satisfied if there are far more taxpayers participating [in the program]. We should have 60 million NPWP [tax identification number] nationwide, but there are still only 30 million as of now,” he said on Thursday.

Southeast Asia’s largest economy has been struggling to find alternative sources of state revenue as it feels the pinch of the global economic slowdown and plunging energy prices.

To help plug the widening state budget deficit, the government is expecting to collect over Rp 165 trillion in penalty payments from its nine-month tax amnesty program, which was kicked off in July.

As part of its efforts to improve the program’s second phase, which will end by December, the tax office plans to take an intensive approach on particular taxpayer segments, including those considered to have earned a big income, such as doctors and lawyers.

Each regional office of the tax authority has also been instructed to approach 100 top taxpayers, including those who have received high exposure from international media, such as Forbes and Fortune.

Alongside big taxpayers, the tax office also plans to boost participation in the amnesty’s second phase from small and medium enterprises (SMEs) with a minimum annual income of Rp 4.8 billion through the help of various public and private institutions as well as business associations.

The tax body is slated to hold a large public campaign event at a famous market center in Jakarta as an effort to lure SME entrepreneurs into participating in the amnesty program.

“We are trying to facilitate them with new rules. For instance, they don’t need to submit soft-copy reports if their list of assets and debts is still under a certain number of items. They can also submit their reports collectively through other representatives, such as their associations,” Yoga said.

Outside Jakarta, Rudy Gunawan Bastari, head of the tax authority’s East Java III regional office in Malang, said the province had many local prospective big taxpayers whose wealth were often not conspicuous compared to national business magnates.

He said redemption payments from the province, which was ranked 14th of the total 33 provinces, reached Rp 1.58 trillion from more than 11,000 asset reports.

Yustinus Prastowo, executive director of the Center for Indonesia Taxation Analysis (CITA), said the tax office should create more incentives for SME entrepreneurs to join the tax amnesty.

Separately, Indonesian Employers Association (Apindo) tax division head Prihandojo Kristanto highlighted the importance of public education of the government’s new tax policy, otherwise it would keep facing stumbling blocks.

“Tax officers, for example, should start providing a simple explanation on why taxes are important in building the country. A lot of people still think that paying taxes is an option, not obligation,” he said. (fac)

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