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Jakarta Post

Govt urged to cancel tax amnesty, focus on law enforcement

  • Anton Hermansyah
    Anton Hermansyah

    The Jakarta Post

Jakarta   /   Fri, April 8, 2016   /  07:49 pm
Govt urged to cancel tax amnesty, focus on law enforcement Divide and rule: Lawmakers seated inside the House of Representatives building. House Deputy Speaker Agus Hermanto said on Wednesday that several political factions had yet to agree to proceed further with discussions surrounding the draft tax amnesty bill. (tempo.com/-)

Activists have urged the government to cancel the tax amnesty program and focus on law enforcement instead, citing that such a program had already been implemented in 1984 and failed.

The activists argued that the tax amnesty would only satisfy big tax evaders, whom are to be offered a rate of six to eight percent. The penalty for tax avoidance is 48 percent while the normal corporate tax rate is 25 percent.

"It will only decrease tax obedience. The government's authority will deteriorate in the eyes of super rich people while those whom obediently pay their taxes, the salary men, will suffer," Fair Tax Forum Coordinator Ah Maftuhchan told thejakartapost.com on Friday.

The government has submitted the tax amnesty bill to the House of Representatives for deliberation but many lawmakers are yet to agree with its content. During a House Steering Committee (Bamus) meeting on Wednesday, House Deputy Speaker Agus Hermanto said that several factions had not yet agreed to proceed further with the draft bill.

Several House political factions have requested that the draft bill be discussed with President Joko "Jokowi" Widodo, a decision that would temporarily halt deliberations. Agus did not say how long deliberations would be postponed.

The government needs to focus on law enforcement, setting up a joint team whose members come from the tax office, Financial Service Authority (OJK), Corruption Eradication Commission (KPK) and the National Police, said Maftuhchan.

Indonesia currently holds seventh position among the list of countries with highest quantities of black money. During 2003 to 2012, Rp 1,699 trillion or Rp 167 trillion per year is reported to have been transferred.

"In 2014 the total transfer reached Rp 227.75 trillion or 11.7 percent of revised state budget," said Publish What You Pay Indonesia Coalition National Coordinator Maryati Abdullah.

In 2014, in the mining sector the transfer reached Rp 23.89 trillion, with Rp 21.33 trillion coming from illegal trade and the remaining Rp 2.56 trillion from hot money. (bbn)

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