Indonesia tax amnesty finds US$40b of unreported assets

INDONESIA’S six-month long tax amnesty programme, its second in the space of five years, has uncovered nearly US$40 billion of hidden assets and earned authorities US$4 billion in extra tax revenue, its finance minister said on Friday.

The programme, which ended on Thursday, sought to improve tax compliance and followed a nine-month amnesty from 2016 to 2017 that uncovered US$300 billion of assets and generated US$9 billion in revenue from penalties.

Official data showed that 247,918 taxpayers participated in the latest programme, declaring US$39.83 billion worth of assets and paying US$4.09 billion in taxes.

The government promised its focus would now shift to improving tax compliance rather than holding amnesties.

“We’re not going to hold another tax amnesty. All the data that we got from this programme will become our baseline to do enforcements,” Finance Minister Sri Mulyani Indrawati told a news conference.

Sri Mulyani declined to measure whether the programme was a success, describing it as one of many efforts by tax authorities to educate the population about tax obligations.

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Under half of the workforce in Indonesia, South-east Asia’s biggest economy, are registered as taxpayers. Its tax ratio, at around 9 per cent of gross domestic product, is among the lowest in the Asia-Pacific region.

The vast majority of amnesty participants were individual taxpayers, but companies also joined. Nearly 8,000 participants declared assets in Singapore, totaling 56.96 trillion rupiah (S$5.3 billion), some of which were pledged to be repatriated home.

Revenue from the amnesty would boost the government’s fiscal position further, having already enjoyed windfall income from booming exports and economic recovery from the pandemic. REUTERS