Selasa, 12 April 2016

MANY VOICE DISCONTENT AGAINST GOVERNMENT'S TAX AMNESTY PLAN

 by Andi Abdussalam
          Jakarta, April 12 (Antara) - The government's plan to introduce a law on tax amnesty to withdraw or repatriate funds stashed abroad has trigger discontent among several circles, including non-governmental organizations and other overseas parties.
        Executive Director of the Center for Indonesia Taxation Analysis Yustinus Prastowo stated on Sunday (April 7) that the government's tax amnesty plan had become the subject of debate among public officials.
         Prastowo said there were apparently parties opposed to the imposition of tax amnesty at a time when the current year was being viewed as the opportune time to implement the plan.
         "Now, is the momentum for those who have parked funds abroad to repatriate their assets, so that they can avoid legal punishment regarding tax violation in future. After all, this year offers the right momentum before the implementation of the Automatic Exchange of Information (AEoI) in 2018," he pointed out.
        The AEoI is a system of automatic exchange of information on tax accounts among countries that will become effective in 2018. This will allow the state to trace assets of citizens stacked abroad.
        Therefore, the government is now submitting a bill on tax amnesty to the House of Representatives for deliberations to be enacted into law. The government's tax amnesty plan mainly aims to repatriate assets into the country.



         According to Prastowo, the repatriation of the assets would help Indonesia become more independent in developing its economy ahead.
         "Unfortunately, there are still several public officials who are opposed to the tax amnesty plan," he affirmed.
         He said there was a ploy by some pro-Singapore Indonesian officials, who were willing to thwart asset repatriation by encouraging the introduction of a two-percent declaration payment tariff and one-percent asset repatriation scheme.
         Yustinus believes that if this scheme is implemented, repatriation through the tax amnesty plan will become less attractive to businesses.
         Taxation analyst Darussalam stated that efforts were ongoing to thwart the government's tax amnesty plan in Singapore. He believes that Singapore is interested in shelving the plan.
         This is because the repatriation process will greatly affect banking liquidity in Singapore. 
    "They will make all-out efforts to abort the plan in the face of the deliberations on the bill. It will have a broad impact if the tax amnesty is imposed," noted Darussalam.

         The amount of money of Indonesians kept in Singapore is huge. The liquidity of Singapore's financial sector will surely be affected if the tax amnesty plan is implemented, Darussalam added.
         In the meantime, non-governmental organizations grouped in the Tax with Justice Forum have urged the government to cancel its plan to give tax amnesty because it will not increase tax collection optimally.
         "Cancel the plan to give tax amnesty to super rich tax payers because it is counter-productive to efforts to optimize tax collection," the coordinator of the forum, Ah Maftuchan, said in a press release received in Jakarta on Thursday (April 7).
          Ah Maftuchan who is also executive director of "Prakarsa Association" said tax amnesty is a setback in money laundering and tax law enforcement.
         Apart from that he said it would also reduce tax payers' compliance to pay taxes and the government's authority before the super rich and corporations.
         It would also hurt small and medium tax payers who have so far always paid their taxes, he added.
        Finance Minister Brodjonegoro has earler said that the tax amnesty policy will be implemented after  its bill had been deliberated with the DPR. The tax amnesty plan is mainly aimed at attracting the repatriation of funds stashed abroad. "President (Joko Widodo) hopes that the Tax Amnesty policy will trigger asset repatriation," note the fiancé minister.
        The DPR said on Wednesday (April 6) it postpone the deliberations of the bill with regard to the leaked of the Panama Papers.
        Deputy Speaker  Fadli Zon said the House Consultative Body (Bamus)  had decided to put off debate on the tax amnesty bill pending a consultation with the government. He said the House wanted to know the road map of the government related to tax amnesty especially with the unveiling of the 'Panama Paper" document.
         "In the meeting a while ago, Bamus decided to wait until we have consultation with the government," Fadli said after the meeting. He referred to millions of documents of a law firm Mossack Fonseca of Panama on financial scandals leaked to the public.
         The scandals involved 140 politicians including 12 state leaders, celebrities and sport starts. A number of Indonesian business leaders and retired officials are mentioned in the documents.
         However, in its meeting on Monday (April 11), the Bamus decided to continue deliberating the tax amnesty bill without the need to have a consultation meeting.  "The DPR has decided it. We ordered Commission XI to deliberate it with the minister assigned by the president," House Speaker Ade Komarudin said on Monday.
        Finance Minister Bambang Brodjonegoro has said about 79 percent of the names of Indonesian citizens that figured in the Panama Papers matched the data of the Indonesian directorate general of taxation.
       "We found that some 79 percent of the names of Indonesians on the Panama list are the same as the names in the directorate general's taxation data. They are believed to have accounts overseas. This year, we will enforce the law. This is in line with the directorate general's program which set this year as the year of law enforcement," Bambang said during a working meeting with Commission XI on financial affairs of the House of Representatives  (DPR) in Jakarta on Monday (April 11).
        He said with the tax amnesty, tax payers who have not reported their assets abroad  would be encouraged to comply with their obligation to submit reports to the taxation authorities.
        Bambang Brodjonegoro said he hoped tax payers would use the opportunity to meet their obligation without facing legal action.   Failure to utilize the opportunity  would risk facing crack down  by the government on delinquent tax payers, he said.
         The minister said the government would prepare data of the assets  of tax payers  that tax amnesty or law enforcement could be effectively implemented.
    "First we are focused on tax amnesty, after that law enforcement. The sanction for tax evasion is penalty  up to 46 percent," he said.
          He said the Ministry of Finance, through the directorate general of taxation, will check the names of Indonesian citizens who were believed to have accounts overseas.
         The directorate general of taxation will trace the names of the Indonesian people which match the data in the Panama Papers although those people had settled their tax obligation.
         "We want to ask them why they did not report their assets overseas to the directorate general of taxation. The essence of  tax amnesty is to report assets which have not yet been reported  through the annual SPT tax report document," the minister said.
(a014/INE)EDITED BY INE(T.A014/A/BESSR/A. Abdussalam) 12-04-2016 15:35:1

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