Indonesia uncovers US$600m in first month of tax amnesty

Jakarta

INDONESIA'S second tax amnesty programme in the space of five years has unearthed nearly US$600 million of unreported assets in its first month, official data showed, as some analysts warned against repeating such programmes too often.

President Joko Widodo launched the 6-month tax amnesty on Jan 1, though he did not announce a target for asset declaration or revenue.

The programme allows participants of the president's first tax amnesty, held for 9 months in 2016 to 2017, to disclose any assets not declared in the first round. Taxpayers can also declare unreported assets acquired between 2016 to 2020.

Authorities will regard declared assets as additional income and tax them at between 6 per cent to 18 per cent, far higher than penalty rates in the earlier amnesty.

The government described the first amnesty as one of the world's most successful after it uncovered more than US$300 billion of assets, resulting in more than US$9 billion in revenue from penalties.

Both amnesty programmes were aimed at improving compliance in a country where less than half of the workforce are registered taxpayers.

Official data showed 9,276 taxpayers joined the programme in January, declaring 8.47 trillion rupiah (S$793.95 million) of assets and with 903 billion rupiah of revenue collected.

Wahyu Nuryanto, a partner at tax consultancy MUC Consulting, said while authorities had not set targets, the number of participants in January was less than 10 per cent of the previous amnesty.

"I hope this programme can improve compliance, but this depends on, among other things, the government's commitment to never provide amnesties in the future," he said.

The Organisation for Economic Co-operation and Development (OECD) has previously advised Indonesia not to repeat tax amnesty programmes to avoid future evasion. REUTERS