Jakarta introduces tax amnesty to repatriate assets held abroad
Under new rules, Joko Widodo will forgive wealthy tax evaders on condition they bring their assets back to Indonesia and declare them to the authorities. Otherwise, they will be fined. As the rich wonder, accountants prep for extra work.
Jakarta (AsiaNews) – The government of President Joko Widodo plans to introduce an amnesty for tax dodgers in order to increase the number of those who pay taxes, repatriate assets held abroad, increase investment in Indonesia and consolidate the public budget.
Under the new rules, Indonesian tax evaders have to declare their assets to the authorities. If this is not done by September, a 2-4 per cent penalty tax will be imposed on their declared asset value. This will increase to 5 per cent by December, and 10 per cent by March next year.
Total penalty payments reached so far 947 billion Indonesian rupees (US$ 71.5 million). With this change, Jakarta aims to repatriate hidden assets.
Finance Minister Sri Mulyani said that the money will come mainly from Singapore. As of 20 August, Indonesian citizens held 6 trillion Indonesian rupees, and rising, in the city-state.
She confirmed that the Singaporean authorities “firmly support us”, noting “that there would be no new Singaporean governmental policy and financial regulation to hamper our efforts to impose tax amnesty policy”.
The United Kingdom is the second tax haven for Indonesians with at least 140 billion rupees.
President Widodo’s new policy has shaken up the modus operandi of many wealthy Indonesians who are now wondering what to do vis-à-vis the government's position.
Whilst the new rules are a challenge for tax cheats, they are a bonanza for accountants who are now having to work overtime.
One Catholic accountant, who wished to remain anonymous, said that he had never been so busy as in the last few weeks with wealthy people asking advice on what to do under the new rules.
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