Tax Amnesty Starts to Work Out, Govt Expects Rp45 T in Revenue by September

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The tax amnesty program starts to show results as a number of big conglomerates have taken part in the program. The Directorate General of Taxes is optimistic that it will rake in at least Rp 45 trillion (US$3.4 billion) in revenue from the tax amnesty program by the end of September.

“The tax revenue from the amnesty program has been growing by between Rp 1.5 trillion and Rp 2 trillion on a daily basis since the beginning of September,” Ken Dwijugiasteadi, director general for taxation at the Finance Ministry, said on Thursday (15/9). “You can count by yourself how many more we can get in the remaining 11 working days.”

Ken expressed his optimism after a number of public figures, tycoons and conglomerates openly announced their participation in the tax amnesty program.

It began with Sofjan Wanandi, a tycoon who recently joined Vice President Jusuf Kalla’s advisory team, and property magnate James T. Riady from the Lippo Group. They filed the application for an amnesty for their undeclared assets in the second week of September. They became the first wave of high-profile conglomerates to join the program.

“In addition to declaring my unreported assets, I also repatriate a big chunk of funds to be invested in Indonesia. I hope my example will encourage others to follow suit,” said Sofjan whose empire, the Santini Group, runs businesses in infrastructure, automotive parts, natural resources, property development and services.

Sofjan’s deed indeed has encouraged other tycoons to emulate. Garibaldi “Boy” Thohir, chief executive of coal producer Adaro Energy, and his brother Erick Thohir, a media mogul under the banner of the Mahaka group, submitted their applications at the Sudirman tax office in South Jakarta.

According to Boy, the form filling process was hassle free. Backing his brother’s statement, Erick urged other businesspeople to join the tax amnesty program as soon as possible, so that they could run a more transparent business.

Hutomo Mandala Putra, better known as Tommy Suharto, the son of Indonesia’s second president, Suharto, also joined the program on Thursday (15/9). Tommy hinted that other Suharto family members may “supposedly follow suit soon.”

Celebrity lawyer Hotman Paris Hutapea publicly joined the tax amnesty program around the same time as Tommy but in a separate location.

According to Hotman, other lawyers will opt to join the program because most of them do not want to pay huge fines for not reporting their time deposits once the Automatic Exchange of Information (AEoI) framework is implemented in 2018.

The government has set a target of Rp 165 trillion in additional tax revenue by March next year. So far nearly Rp 23 trillion has been collected from the tax amnesty program which has become known as President Joko Widodo’s signature policy.