Indonesian Tax Amnesty Program Set to End Friday

 

About 10 percent of Indonesians are registered taxpayers¹ and only about one million report their taxes to the government.

That is not a lot for the world’s fourth most populous² country. Indonesia is home to almost 260 million people.

The comparatively small number of taxpayers might be one reason for Indonesia’s growing budget deficit³.

In the summer of 2016, the government launched a program to increase uncollected tax revenue. It offered to forgive individuals who were late or failed to make tax payments if they paid their taxes.

The amnesty program was aimed at wealthy Indonesians who keep some of their money and investments overseas. It is set to end on March 31.

The program, however, has been criticized by the Organization for Economic Co-operation and Development, Indonesian labor⁴ unions and other groups. They say it does not punish tax evaders enough and it is unfair to other taxpayers.

Tax amnesty program could increase revenue

Asmiati Malik is an economics researcher at the University of Birmingham in England. She says the money from the amnesty program could reduce Indonesia’s budget deficit by a large amount.

“It could do so by as much as 70 percent: from $23 billion to $8.2 billion,” she said.

The Jakarta Post newspaper reported earlier this month that up to 4,000 people were signing up for the program every day in March.

The Directorate of Taxation⁵ says that more than three million Indonesians became new taxpayers over the past year.

The new taxpayers include business people in the Indonesian Chambers⁶ of Commerce and Industry. Many signed up for the tax amnesty program this year.

Yustinus Prastowo is with the Center for Indonesia Taxation Analysis. He says the amnesty program offers good reasons for people to take part and return money from overseas.

“Two huge benefits of the amnesty program for taxpayers now are the low interest rate and the abolition⁷ of tax debt,” he said.

If they bring their financial assets back to Indonesia, individuals will be charged between two and 10 percent interest. That is in place of the business or personal income tax rates, which can reach 30 percent.

Those signed up for the program must promise to keep their assets in Indonesia for three years.

Many wealthy Indonesians keep money in places with low taxes, such as nearby Singapore.

Reports say Indonesia has recovered more money from its tax amnesty experiment than other countries, such as India and Germany.

A goal: increase those participating in taxation

“The major issue is that the number of taxpayers who joined the amnesty program is still low,” noted⁸ researcher Asmiati Malik. She said about 700,000 people joined the program, but that “is only 2.2 percent of those eligible⁹.”

She thinks many more Indonesians could be added to the list of those being taxed. She called for a tax policy designed to increase participation¹⁰ in both the amnesty program and taxation in general.

Indonesia is expected to join the Organization for Economic Co-operation and Development (OECD) as a full member in September. When it does so, the country will share its tax information internationally. That means it will be able to find out details of Indonesian citizens’ assets in other countries, such as Singapore and the Cayman Islands.

On Monday, the Directorate General of Taxation announced it would give “special attention” to very wealthy Indonesians who had not yet registered for tax amnesty.

But political unrest could hurt efforts to get the wealthy to repatriate¹¹ money from overseas.

In November and December, there were protests against Jakarta’s governor, a Chinese Christian¹². Yustinus Prastowo said political and ethnic¹³ unrest are reasons investors¹⁴ keep money out of the country.

OECD remains¹⁵ critical

The OECD, however, has been critical of Indonesia’s tax amnesty plan.

Philip Kerfs is an advisor¹⁶ for the OECD’s Centre for Tax Policy and Administration. He told Bloomberg news that amnesty programs are “unlikely to deliver benefits that exceed their true costs.” Kerfs added that these programs might hurt tax revenue over time and efforts to get people to pay taxes.

Groups opposed to the program say it lets Indonesians ignore the law.

Words in This Story

Revenue –n. money that is paid to a business, organization or government

Evaders –n. people who avoid something

repatriate –v. to bring back into a country

assets –n. someone or something of value

amnesty –n. the act of not punishing a group or permitting them to go free

1 taxpayers   

纳税人，纳税的机构( taxpayer的名词复数 )

参考例句：

• Finance for education comes from taxpayers. 教育经费来自纳税人。
• She was declaiming against the waste of the taxpayers' money. 她慷慨陈词猛烈抨击对纳税人金钱的浪费。

2 populous   

adj.人口稠密的，人口众多的

参考例句：

• London is the most populous area of Britain.伦敦是英国人口最稠密的地区。
• China is the most populous developing country in the world.中国是世界上人口最多的发展中国家。

3 deficit   

n.亏空，亏损；赤字，逆差

参考例句：

• The directors have reported a deficit of 2.5 million dollars.董事们报告赤字为250万美元。
• We have a great deficit this year.我们今年有很大亏损。

4 labor   

n.劳动，努力，工作，劳工；分娩；vi.劳动，努力，苦干；vt.详细分析；麻烦

参考例句：

• We are never late in satisfying him for his labor.我们从不延误付给他劳动报酬。
• He was completely spent after two weeks of hard labor.艰苦劳动两周后，他已经疲惫不堪了。

5 taxation   

n.征税，税收，税金

参考例句：

• He made a number of simplifications in the taxation system.他在税制上作了一些简化。
• The increase of taxation is an important fiscal policy.增税是一项重要的财政政策。

6 chambers   

n.房间( chamber的名词复数 )；（议会的）议院；卧室；会议厅

参考例句：

• The body will be removed into one of the cold storage chambers. 尸体将被移到一个冷冻间里。 来自《简明英汉词典》
• Mr Chambers's readable book concentrates on the middle passage: the time Ransome spent in Russia. Chambers先生的这本值得一看的书重点在中间：Ransome在俄国的那几年。 来自互联网

7 abolition   

n.废除，取消

参考例句：

• They declared for the abolition of slavery.他们声明赞成废除奴隶制度。
• The abolition of the monarchy was part of their price.废除君主制是他们的其中一部分条件。

8 noted   

adj.著名的，知名的

参考例句：

• The local hotel is noted for its good table.当地的那家酒店以餐食精美而著称。
• Jim is noted for arriving late for work.吉姆上班迟到出了名。

9 eligible   

adj.有条件被选中的；(尤指婚姻等)合适(意)的

参考例句：

• He is an eligible young man.他是一个合格的年轻人。
• Helen married an eligible bachelor.海伦嫁给了一个中意的单身汉。

10 participation   

n.参与，参加，分享

参考例句：

• Some of the magic tricks called for audience participation.有些魔术要求有观众的参与。
• The scheme aims to encourage increased participation in sporting activities.这个方案旨在鼓励大众更多地参与体育活动。

11 repatriate   

v.遣返；返回；n.被遣返回国者

参考例句：

• The government safely repatriates victims.政府安全遣返了受害者。
• In this part,you need to formulate in detail repatriate the plan.在这一部分，你需要制定详细的归国计划。

12 Christian   

adj.基督教徒的；n.基督教徒

参考例句：

• They always addressed each other by their Christian name.他们总是以教名互相称呼。
• His mother is a sincere Christian.他母亲是个虔诚的基督教徒。

13 ethnic   

adj.人种的，种族的，异教徒的

参考例句：

• This music would sound more ethnic if you played it in steel drums.如果你用钢鼓演奏，这首乐曲将更具民族特色。
• The plan is likely only to aggravate ethnic frictions.这一方案很有可能只会加剧种族冲突。

14 investors   

n.投资者，出资者( investor的名词复数 )

参考例句：

• a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
• a cash bonanza for investors 投资者的赚钱机会

15 remains   

n.剩余物，残留物；遗体，遗迹

参考例句：

• He ate the remains of food hungrily.他狼吞虎咽地吃剩余的食物。
• The remains of the meal were fed to the dog.残羹剩饭喂狗了。

16 advisor   

n.顾问，指导老师，劝告者

参考例句：

• They employed me as an advisor.他们聘请我当顾问。
• The professor is engaged as a technical advisor.这位教授被聘请为技术顾问。