JAKARTA (TheInsiderStories) - Members of the Indonesian Chamber of Commerce and Industry (KADIN) have expressed their commitment to declare and repatriate their funds from abroad. The entrepreneurs on Tuesday (Sept. 27) reported their personal and company’s assets to the Directorate General for Taxation. They were greeted by Finance Minister Sri Mulyani Indrawati and Directorate General for Tax Ken Dwijugiasteadi.
Among the entrepreneurs are Rosan P. Roeslani and Sandiaga Uno from PT Recapital Advisory, Anindya N. Bakrie and Bobby Gafur Umar from Bakrie Group, Franky Widjaja from Sinar Mas Group, Wisnu Wardhana from Indika Group, Putri Kusumawardani from Mustika Ratu and MS Hidayat from MSH Group and more.
The other members, such as James Riyadi from Lippo Group, Garibaldi Thohir dan Eric Thohir, Tommy Soeharto, Sofyan Wanandi and more have reported and declared their assets earlier.
Based on directorate general for taxation on Sept. 27 the amount of assets declaration has reached Rp 2,476 trillion and repatriated funds amounted to Rp127 trillion. Of these, the amount of declared funds and still placed abroad amounted to Rp654 trillion. The amount of redemption under the tax amnesty scheme has reached Rp53.4 trillion.
Finance Minister Sri Mulyani Indrawati said she still expects the amount of funds repatriated to Indonesia to remain high, given the fact that there are about Rp2,350 trillion funds parked in Singapore owned by Indonesians, based on McKenzie data. “Tax Amnesty provides opportunity for these fund to return to Indonesia as Indonesia still needs huge amount of resources to fund its development,” she said.
To lure more repatriated funds coming to Indonesia, the Finance Ministry has issued two new ministerial decrees (PMK) and Directorate General for Taxation Regulation, which relaxed the Tax Amnesty procedures. These include relaxation in submitting document until Dec. 31, 2016, report once a year from two years previously and an option not to dismiss an SPV abroad.
Rosan P. Roeslani, chairman of Kadin, said some of Indonesians funds abroad are placed in investment instruments. He hopes these funds can return to Indonesia. “It is understandable that banks in Singapore appear to hamper the return of the funds. The problem is fund owners may find it difficult to transfer back their money if there is no underlying assets,” he said.
The President has allowed fund owners to pay redemption money of 2 percent of total declared assets until end December 2016, as long as they make report before end of this month, the first phase of the Tax Amnesty program. “Our priority is the repatriated funds. It is clear that business players are welcoming this program and are enthusiast to return their money to Indonesia. We are fully committed to make this Tax Amnesty program successful,” Rosan said.
Minister Sri Mulyani welcome Kadin’s commitment to support the government’s Tax Amnesty program as reflected by the move by Kadin members to take part in the program, which helped lift the amount of redemption funds to Rp65.9 trillion. “We hope they (Kadin members) help support the development of Indonesia by bringing back their funds abroad, as if Indonesia’s economy is strong, the Kadin members would also be stronger,” Sri Mulyani said.
She added the improved tax compliance will also benefit the country as it helps improved Indonesia’s tax base or tax ratio, which is still low. “As a Finance Minister, we certainly appreciate the trust of the business players and would utilize these funds well. I hope this momentum (tax amnesty program) will improve synergy between the government and business community.” (*)