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[JAKARTA] The Indonesian government on Monday started the implementation of its new tax amnesty programme, more than two weeks after parliament passed the law to boost tax revenues by repatriating funds stashed abroad.
"Starting today, the tax office has started operations to service those who want to participate in the amnesty," Finance Minister Bambang Brodjonegoro told reporters at an event in Jakarta on Monday.
The finance minister said he will hold a news conference later on Monday to announce details of the programme.
The government will impose a 2-5 per cent tax for assets brought back onshore by March 2017. Those assets must be kept in Indonesia for three years in funds managed by appointed banks, and can be invested in several ways, including government bonds.
Tito Sulistio, head of Indonesia Stock Exchange, said on Monday 19 banks will be allowed to manage the funds, up from seven banks announced last week.
However, the finance minister said the banks still need to wait for an official appointment letter from the government to formalise the mandate.
Bank Negara Indonesia Tbk might receive up to 75 trillion rupiah (S$7.72 billion) of inflows from the programme, Panji Irawan, a director with the bank, told Reuters. Bank Mandiri chief executive Kartika Wirjoatmodjo last week told Reuters the potential inflows into the bank from the programme "could be huge".
The mandated banks can manage the funds through asset management firms and brokerage houses listed by the government, Mr Sulistio said. Among them are Schroders Indonesia, Manulife Aset Manajemen, Eastspring Investments Indonesia and Panin Asset Management.
Some US$200 billion in Indonesian money is thought to be stashed in Singapore and wealth managers there worry an Indonesian amnesty might lead to an outflow of assets from the city-state's massive wealth management industry.
The programme, however, still faces possible challenges at home. Legal activists last week filed a request for a judicial review on the amnesty in the Constitutional Court, saying it will hurt Indonesia's anti-graft efforts and protect tax evaders. A preliminary hearing will be set 14 days after the court verifies the documents.