GOVERNMENT TO EVALUATE AND IMPROVE TAX INCENTIVES

by Andi Abdussalam

Jakarta, Sept 16 (Antara) - In a bid to boost economic growth and increase the state's tax revenues, the government has issued several tax policies and incentives to facilitate companies to conduct their economic activities.         However, the lack of interest among businesses to utilize various tax incentives has prompted the government to evaluate them to identify the areas for improvement.          Several tax incentives have been formulated and issued since 2005 when Sri Mulyani Indrawati was the finance minister in the previous government.          Mulyani, who continues to retain the portfolio of the finance ministry in the current government, pointed out that the utilization of various tax incentives, such as tax holidays, tax allowances, and other tax-free facilities, was still limited.          Hence, the finance minister is ready to conduct an evaluation of the various tax incentives that have failed to draw players to boost economic activities.         "We will analyze where the constraints lie, whether they are with us or the businesses or whether there are other obstacles. We will identify what the obstacles are," the minister had remarked recently on Sept 6.

GOVT EXPECTS RP165 TRILLION FROM TAX AMNESTY PROGRAM

by Andi Abdussalam

Jakarta, June 29 (Antara) - The House of Representatives (DPR) enacted into law on Tuesday the government's tax amnesty bill which will provide tax pardons for the repatriation of assets worth thousands of trillions of rupiah currently stashed abroad.          The government hopes to receive Rp165 trillion in taxes from tax redemptions and asset declarations of the repatriated money. Money to be obtained from the tax amnesty program is accounted for in the 2016 Revised State Budget (APBNP 2016).          Finance Minister Bambang Brodjonegoro had previously forecast that taxpayers registering for the tax amnesty program would declare overseas assets of up to Rp4 thousand trillion, while the income flow of repatriated funds is expected to reach Rp1 thousand trillion.        The amended state budget has a deficit of Rp296.7 trillion, with a target for state income and grants totaling Rp1,786.2 trillion and state expenditures totaling Rp2,082.9 trillion.          The state income includes the Rp165 trillion in taxes expected from the repatriation of capital during the tax amnesty period, which will remain in effect until March 2017.          Brodjonegoro said he would select investment management companies and banks to accommodate the repatriated funds.          "We will carefully select investment management companies and banks," the minister stated last month.

HOUSE EXPECTED TO WRAP UP DEBATES ON TAX AMNESTY BILL

By Andi Abdussalam

Jakarta, May 31 (Antara) - The government has expressed hope that the House of Representatives (DPR) would have wrapped up deliberations on the tax amnesty bill at the end of May or early in July, 2016.          "We hope that the DPR would have reached an agreement on the draft law of the tax amnesty at the end of this month or early in July before the recess of the House ended," Vice President Jusuf Kalla said on Thursday last week.          Deliberations on the tax amnesty bill are still undergoing at the Parliament and are focusing on technical matters such as the use of revenues obtained from the repatriation of the overseas assets.           The implementation of  a tax amnesty law  is expected to encourage disobedient tax-payers --who have so far stashed assets abroad-- to repatriate their funds into the country. The government hope to receive funds from redemption and declaration of the repatriated assets.          "Basically, the DPR in general will not object to it. There will be improvement in the draft law, so let us wait for it. Most of the deliberations in the Parliament focused on the tariff details, mechanism of its implementation and how to accommodate the funds if the money is coming in," the vice president explained.

INDONESIA EXPECTS ASSET REPATRIATION OF RP560 TRILLION

By Andi Abdussalam

Jakarta, April 25 (Antara)  The Indonesian government is now submitting to the House a tax amnesty bill which, according to the country's central bank, Bank Indonesia (BI), could facilitate the repatriation of about Rp560 trillion of assets stacked abroad so far.          The House of Representatives (DPR) will likely finish deliberations on the bill by the end of next month (May). If endorsed into law and implemented, about 60 percent of assets worth Rp3,147 trillion could be eligible for tax amnesty or pardon.          The Global Financial Integrity 2015 data showed funds belonging to Indonesians stashed abroad totaled Rp3,147 trillion. However, not all of the amount could get tax amnesty.          According to BI Governor Agus Martowardojo,  only about 60 percent of the total funds abroad could be pardoned based on the tax amnesty scheme.          The remaining 40 percent could not receive the tax amnesty facility because the funds were gathered through illegal sources, such as corruption, narcotics trade and human trafficking.

HOUSE EXPECTED TO FINISH TAX AMNESTY DEBATE IN MAY

By Andi Abdussalam

Jakarta, April 23 (Antara) - The government hopes that the House of Representatives (DPR) will wrap up deliberations in May of the tax amnesty bill which has been in parliament since it was submitted by the government last year.          The DPR should keep its promise to finish deliberating on the tax amnesty bill by the end of May 2016, Vice President Jusuf Kalla said. The debate on the bill was previously expected to be wrapped up by parliament last January.          It would be impossible to finish the debates during this current sitting period of the parliamentary session which will end on April 29, Chairman of the Commission XI on financial affairs of the DPR, Ahmadi Noor Supit said.          "I think we could rush to finish it before the draft revision of the state budget (APBNP) is passed into law. Hopefully we could do it end of May," Supit said after a meeting with Vice President Jusuf Kalla in Jakarta Wednesday (April 20).          The government needs to introduce a tax amnesty law in an effort to withdraw or repatriate big funds or assets stacked overseas. The repatriation of funds so far stashed abroad will increase the number of new taxpayers and raise the state revenues from tax receipts.

TAX AMNESTY MUST ALSO TARGET TAX DODGERS AT HOME

By Andi Abdussalam

Jakarta 14 (Antara) - The government has submitted a proposal of a draft law on tax amnesty to the House of Representatives (DPR) aimed at repatriating money or assets stacked abroad.          The amount of money stashed in overseas banks is believed to be huge, and its repatriation would help Indonesia carry out its economic development independently without the need to increase its external debts.          According to Executive Director of the Center for Indonesia Taxation Analysis Yustinus Prastowo, the repatriation of the assets would help Indonesia become more independent in developing its economy ahead.          In addition, it could further help the country if tax dodgers at home, who are in large numbers, could also pay their taxes. Therefore, the tax amnesty should also target errant tax payers at home.          The number of corporate bodies in Indonesia reaches some five thousand companies, but only some two thousand of them are registered with the directorate general of taxation. Of these registered companies, only some 500 regularly pay taxes.

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.

EMPLOYERS LAUD INCREASE IN NON-TAXABLE INCOME

by Andi Abdussalam

Jakarta, April 8 (Antara) - The Indonesian Employers Association (Apindo) has hailed the government's decision to raise the annual non-taxable income (PTKP) amount from Rp36 million to Rp54 million.          The government has put forth a proposal to the House of Representatives to increase the PTKP from Rp36 million to Rp54 million per annum to be effective starting this year.          "It is a positive move and good for the government to raise the PTKP amount as it could boost the purchasing power of the people," Apindo General Chairman Haryadi Sukamdani stated after attending a discussion at the office of the chief economic minister in Jakarta on Thursday.          He acknowledged that the hike in the PTKP amount will increase the burden on employers, particularly in terms of health security guarantee, which is twice the PTKP amount.          However, he pointed out that the matter was still within bearable limits since the new government's policy will stimulate consumption.

GOVT TO TRACK TAXPAYERS THROUGH REGISTERED CARDS

By Andi Abdussalam

Jakarta, April 1 (Antara) - A legislator has proposed that the taxpayers' numbers (NPWP) should be included in their identity cards (KTP) to make it easy for the government to trace taxpayers.          This proposal came after the government, in this case the Finance Minister, issued a regulation requiring reports on credit card transaction data. This is part of the government's efforts to track down taxpayers and increase tax revenues.          Failing to meet its tax target last year, the government is determined to go all out to collect taxes it has set this year at Rp1,360 trillion. Last year, it failed to meet the target set in the state budget at Rp1,294 trillion. It only collected Rp1,060 trillion, or about 81.9 percent of the target.          "It has been hard to trace taxpayers so far. Many of them have separate NPWP and KTP cards with different addresses so tax officials face difficulties tracing them," legislator Hery Gunawan, a member of Commission XI on Financial Affairs of the House of Representatives (DPR), said in Sukabumi, West Java, on Thursday.          He said the House has been deliberating a proposal at the Commission level and hopefully, in the near future it will be submitted to the government. The inclusion of the NPWP in the identity card (KTP) of the taxpayers is expected to boost state income from the tax sector.

COMPANIES GIVE POSITIVE RESPONSES TO GOVT TAX CUTS

by Andi Abdussalam

Jakarta, Nov 13 (Antara) - The government step to offer cuts on income tax for firms willing to revaluate their assets, as promised in its economic policy package, has received positive responses from many companies.         Finance Minister Bambang Brodjonegoro is convinced that numerous companies have been interested in conducting asset revaluations to obtain tax incentives in the form of tax cuts.         "Many companies, particularly in the financial sector, have positively responded to the policy and expressed their intention to carry it (the revaluation) out this year," the finance minister said on Monday.          Through this policy, the government offers tax incentives in the form of tax cuts on income tax from the previous 10 percent to the reduced six percent, four percent and three percent.          Bambang said that positive responses from companies convinced the government that it will be able to increase its tax receipts from companies carrying out asset revaluations. Companies will happily pay their income taxes after seeing reductions from 10 percent to six, four and three percent.

GOVT TO BOOST TAX RECEIPTS THROUGH REINVENTION POLICY

By Andi Abdussalam

Jakarta, Aug 8 (Antara) - The government is introducing a reinvention policy in an effort to boost tax receipts, which as of the second half of this year have not reached 50 percent.          Director General of Taxation Sigit Priadi Pramudito of the Ministry of Finance said that tax collections in the first half of 2015 stood at Rp531.1 trillion, 41.04 percent of the Rp1,294.2 trillion target set in the 2015 Revised Stage Budget.          Therefore, the government will seek to boost tax receipts through a reinvention policy to prevent total receipts from falling too low.          Finance Minister Bambang Brodjonegoro said on Friday that the details in the reinvention policy included the declaration of one year of tax guidance, wherein all taxpayers are urged to correct their tax reports and pay their arrears of the past five years on their own. They will be provided with an administrative penalty-free procedure.          Individuals and corporate bodies who have fulfilled requirements as taxpayers but do not have taxpayer numbers yet are expected to register, submit their tax reports and pay their tax obligations.

LOWER CLASS PEOPLE DESERVE FREE TAX ON LAND, BUILDING

By Andi Abdussalam

Jakarta, Feb 4 (Antara) - The government is considering scrapping land and building taxes (PBB) it collects from owners every year, but some are of the view that it should not generalize all tax payers in imposing the policy.          PBB is one of the main sources of original income (PAD) for regional and city governments. The abolition of PBB collection will significantly reduce their PAD.          Therefore, the government should not generalize PBB payers. It could eliminate its PBB collection from people who are grouped in the lower classes, but it must remain to be imposed on affluent PBB payers.          "If the abolition of the PBB is imposed on the poor, we in the regions will all agree to it," Ahyar Abduh, the Mataram mayor of West Nusa Tanggara Province, said on Saturday.          He said his side supported the government's plan to scrap the PBB but the policy should not be imposed on rich people because they are able to pay it.          The Mataram mayor made the comment in response to the plan of the agrarian and spatial planning minister to scrap the land and building taxes on dwelling houses.          Agrarian and Spatial Planning Minister Ferry Mursyidan Baldan said recently he was considering scrapping land and building tax, which burdens the public.  "This is my opinion. Later people will only pay land and building tax once when they seek land certificate," the minister said last week.

GOVT RESOLVED TO MEET TAX REVENUE TARGET

By Andi Abdussalam

Jakarta, Nov 25 (Antara) -- In the last decade, the Indonesian government always failed to achieve its tax revenue targets, except for in 2004 and 2008, and it is unlikely to be able to do so this year as well.          Of the Rp1,246.1 trillion tax target set in the revised 2014 state budget, only some Rp812 trillion has been collected till mid-November, which is about 65 percent of the amount. Also, the annual growth trend of the government's tax target is only 10 to 20 percent.          The realization of its tax receipts has always been less than the target set in the state budget. Given this fact, the government is resolved to achieve its tax target for 2015, which is projected at Rp1,370.8 trillion.          According to Finance Minister Bambang Brodjonegoro, the government will put in all efforts to boost tax revenues to Rp1,400 trillion in 2015.         "Certain factors must be improved to reinforce the directorate general of taxation. We will see whether it can be done next year," the finance minister said on Friday.          He stated that a measure that could be taken is increasing the number of tax officers because so far, a shortage of these officials has hampered the efforts to optimize tax collection.

NU SAYS CORRUPT COUNTRY DESERVES NO TAXES

By Andi Abdussalam

Jakarta, Sept 17 (ANTARA) - One can imagine what will happen if people do not pay taxes in a country such as Indonesia, in which a majority of development projects are funded by taxes.          Indonesia's largest Muslim organization, Nahdlatul Ulama (NU), which has reportedly more than 30 million members, has raised questions on the people's obligation to pay taxes, on grounds that corrupt officials siphon off the revenue.          "If the government fails to tackle corruption seriously and does not manage taxes well, we will call for a moratorium on tax payment, at least for NU members," NU General Chairman Said Aqil Siroj said during the National Meeting of Ulamas and NU Congress at Kempek Boarding School in Cirebon, West Java, on Sunday.          Earlier in Jakarta, he stated that people should stop paying taxes temporarily until the government proved its commitment to managing taxes for the welfare of the people.          "Based on religious regulations, paying taxes is not an obligation. It is different from paying 'zakat' (alms). There is no obligation for Muslims to pay tax. They only have the obligation to pay zakat," said Said Aquil, who has a doctorate from the Ummul Qura University of Mecca.          He noted that tax payment was only part of the obligation to abide by the government regulations. "But the problem is that the taxes are siphoned off by corrupt officials. So, do we still have the obligation to pay taxes?" Said Aquil asked.          "Therefore, this is a strong warning for the government to seriously and comprehensively improve its tax management system so that taxes are not stolen away," he added.          Said Aquil said NU demanded that taxes collected from the people be managed with full commitment to the welfare of the people, corruption at tax agencies be eliminated, and tax thieves be taken to court and given harsh punishment.          If the government took the necessary steps, he added, NU would support its regulations and call on NU members to pay taxes.          General Chairman of NU Scholars Association (ISNU) Ali Masykur Musa stated that the discussion among NU members on whether to continue paying taxes should be construed by the government as a warning from the biggest Muslim organization.         Indonesia is a Muslim-majority country, because Muslims account for 90 percent of the nation's total population of about 240 million.          "This should be viewed as NU's commitment to the country," Ali Masykur said on the sidelines of the congress.          He noted that taxes were the biggest source of revenue for the state, accounting for about 70 percent of the total state budget. "If the 2013 draft state budget is set at Rp1,540 trillion, some Rp1,200 trillion will come from taxes.          Therefore, NU warns the government and tax officials against playing around with taxes," Ali Masykur added.          The Deputy Secretary General of NU Women organization, Zannuba Arifah Chafsoh, also urged the government to improve its tax management system.  "This is a serious warning. The government should introspect," said Zannuba, the daughter of former president Abdurrahmah Wahid.          Meanwhile, Coordinator of the Clean Indonesian Movement (GIB) Adhie Massardi explained that the NU's threat to stop paying taxes was in line with the response of middle-ranked NU ulamas (Muslim scholars) to increasing corruption in the government.          According to Transparency International's Corruption Perception Index (CPI) 2011, Indonesia ranked 100 out of 183 countries in the world, with a score of 3.0. The score increased by 0.2, compared with previous year's 2.8. In 2010, Indonesia was ranked 110 out of 178 countries. In 2009, it ranked 111th out of 180 nations.          "I think there is discontent among our friends in NU who reckon that people in the upper ranks, or leaders of the Central Board of NU, are too close to the people in power. And because of that such people are unable to criticize the government for the poor socio-political and economic conditions in the country," said Adhie, who is also former presidential spokesman of former president Wahid.          He stated that officials in the executive, legislative and judiciary branches of the state seemed to be carried away by the rising wave of corruption.          "The way of our friends in NU plan to offer resistance to a corrupt regime is reflected in our slogan, 'boycott paying taxes', as most of taxes could be seen misused," Adhie stated.         "Behind the boycott slogan is the spirit of civil resistance, such as ones waged by Mahatma Gandhi in India against the British government," he said.          "Unfortunately, the spirit of resistance to the corrupt regime was present only within the middle ranks of NU, not within its upper leaders. So, the call for boycott seemed half-hearted," Adhie noted.          "Therefore, government officials have also been invited to the meeting and President Susilo Bambang Yudhoyono is scheduled to close the event," he explained.       "So, it is not too hard to guess that the spirit of resistance will immediately die after the event is over," the former presidential spokesman added.          With regard to the management of taxes in the country, legislator Nusron Wahid pointed out that tax reforms had been put in place but the desired results were not achieved.         "The government has carried out tax reforms. But there is no point if the results are not achieved," said Nusron, who is also the deputy chairman of the House of Representatives (DPR)'s Commission XI on financial affairs, in Cirebon.          "Tax reforms have helped raise the ratio of tax receipts against the gross domestic product, from 11 percent to 12 percent. The government is taking actions against tax evaders," he stated.          Therefore, the legislator expressed concerns over NU's call to boycott taxes.          "If people do not pay tax, the government would have no funds to finance education or infrastructure development," noted Nusron, who is also the general chairman of the Anshor Movement, a youth organization of NU.          "I hope this is just a warning to the government so that it steps up its efforts to eliminate corruption," the Golkar Party member said.         Nusran¿s colleague Bachruddin Nashori, from the House Commission III on legal affairs, agreed with him, saying that the NU only intended to warn the government.         "I am convinced the NU Executive Board will not issue a religious advice or fatwa that state taxes should not be paid. I agree that the move is a call for the government to manage taxes well," Bachrudin added.***1*** (T.A014/INE/f001) (T.A014/A/KR-BSR/F001) 17-09-2012 16:29