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View all search resultsIndonesia has held two tax amnesties, in 2016 and 2022, the first of which was initiated on the fallout from the Panama Papers leak that revealed data on individuals holding assets offshore, many in tax haven countries.
inance Minister Purbaya Yudhi Sadewa has said the government will not grant any tax amnesty so long as he remains in the post, as such a move would be detrimental to future revenue collection.
The minister said in a media briefing on Monday that rather than holding another tax amnesty, he preferred to carry out “correct tax procedures”.
“So long as I’m the finance minister, I will not grant a tax amnesty. If that happens, that means I’m fired, which is okay,” said Purbaya, arguing that such government-granted leeway would create “vulnerability” for tax officials.
Indonesia has held two tax amnesties, in 2016 and 2022, the first of which was initiated on the fallout from the Panama Papers leak that revealed data on individuals holding assets offshore, many in tax haven countries.
The leaks provided justification for the first tax amnesty with the mindset that the data could lay the groundwork for the indictment of tax evaders. The amnesty provided immunity if evaders voluntarily filed their assets properly and paid their taxes accordingly.
Read also: The moral hazard and injustice of another tax amnesty
The second tax amnesty was granted to boost tax revenue but many analysts criticized the policy given that an amnesty is supposed to be a one-off program. Subsequent amnesties would create moral hazard by, for instance, incentivizing tax evaders to bet that the government will grant another in the future and thus choose to continue to avoid paying their taxes in full.
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