Finally, Parliament Legalized Tax Amnesty Laws
Today, June 28, 2016, a plenary session of the House of Representatives (DPR) legalized the Draft of Tax Amnesty Laws to become Tax Amnesty Laws. The approval is the result of a meeting attended by 298 board members. The Government plans to start the socialization of tax amnesty on Wednesday, June 29, 2016.
Although it has been legalized, but the Minister of Finance Bambang PS Brodjonegoro estimate the tax amnesty only officially take effect after Eid Fitr 1437 H. For information, in the Draft of Tax Amnesty Laws has been agreed by Komisi XI DPR, validity period of tax amnesty start from the Laws applied until March 31, 2017.
Minister of Finance, Bambang Brodjonegoro see any potential repatriation of funds of about IDR 1.000 trillion and assets declaration to IDR 4.000 trillion with the implementation of tax amnesty policy for the next nine months. In addition, the state treasury will receive additional revenue of IDR 165 trillion from the levy ransom.
Hopefully, with the tax amnesty, then the funds will come in and help stimulate the domestic economy and also contribute to economic growth.
What is Tax Amnesty? Tax Amnesty Laws or Pengampunan Pajak is part of the overall tax reform in Indonesia. Tax Amnesty Laws is the starting point which will be followed by amendments to the others Tax Laws such as RUU KUP (Draft of General Provisions and Procedures of Taxation Law), RUU PPh (Draft of Income Tax Laws), the RUU PPN & PPnBM (Draft of VAT and LGST Laws) and RUU Bea Materai (Draft of Stamp Duty Laws). Tax amnesty is important because the level of tax compliance rate in Indonesia is still very low. Tax revenues during this time only supported by a handful of taxpayers whereas the aspect of justice can be obtained when financing the country’s development can be supported by a growing number of taxpayers.
The purpose of tax amnesty is brought taxpayer who has not obeyed and tax object that has not been reported into a tax administration system as the data along with information exchange financial data banks in 2017 for use oversee taxpayer patterns after the tax amnesty. Tax amnesty is also intended to encourage the repatriation of funds stashed abroad to go back into Indonesia to be used to drive the economy of Indonesia through various forms of investment. In the short term, it also produces a redemption that can increase state budget revenues in 2016. The presence of additional State Revenues are expected to be used to build infrastructure in the interests of public.
The Importance of Tax Amnesty policy based on the following considerations:
- International developments related to taxation which in 2018 began to apply the exchange of data and information between countries that are massive, including information about the bank;
- Tax Amnesty policy is a policy which is common practice in many countries in order to attract funds from abroad into the country as well as to face the competition between the relevant state taxation policy;
- Tax Amnesty policy as a momentum to create a modern tax administration system and to build a database of more comprehensive tax; and
- Tax Amnesty policy is the last chance for the public to reveal assets that has not or under-reported to the tax authorities.
By sticking to the principle of legal certainty and usefulness, purpose and objective of Tax Amnesty Laws are as follow:
- Give public an opportunity to correct the error in the fulfillment of the tax obligations;
- Increase public compliance;
- Withdraw assets which in and / or placed outside the territory of the Republic of Indonesia;
- Broadening the base of taxation;
- Increase state revenues; and
- The transition to the new tax administration system stronger and fair.
To find out more about Tax Amnesty Laws directly from the Drafting Committee Member, please join us in Seminar of Tax Amnesty which will take place in the end of July 2016. Please contact us or visit our website for further information.
Source : Summarized from finance.detik.com/
