JAKARTA (TheInsiderStories) - The government said it is targeting to get additional revenues from tax amnesty policy around Rp 180 trillion (US$13.24 billion) which will help increase government revenues in the 2016 State Budget, Finance Minister Bambang Brodjonegoro This revenues assume that the People’s Representative Council (DPR) will enact the Tax Amnesty bill, which is being deliberated by the Parliament, into law.
“The revenues could reach around Rp 180 trillion and around Rp 165 trillion would flow in the (2016) State Budget,” Minister Bambang Brodjonegoro said at a hearing with Commission XI of the House of Representatives in Jakarta on May 23.
The minister said the government plans to impose tax tariff of 2 percent of the value of assets (funds) that are declared and repatriated to Indonesia, which is estimated to reach Rp1,000 trillion, and 4 percent tax amnesty tariff for funds that are declared but are not repatriated, which are estimated to reach Rp3,500-4,000 trillion.
He, however, said the additional state revenues depend on the rate set by the Tax Amnesty law. If the tax rate is set higher, the additional revenues would also definitely larger.
Meanwhile, Bank Indonesia expects asset repatriation from tax amnesty program to boost economic growth by 0.3 percentage point this year and next year, BI Governor Agus Martowardojo stated. The inflow will also help the rupiah strengthen by 150 points against the US dollar this year and 120 points in 2017, he added.
The central bank said the planned tax amnesty program could potentially attract funds repatriation from abroad amounting to Rp 560 trillion ($41 billion) of assets parked abroad.
Analysts are saying that it is not enough for the government to create the tax amnesty law. The government needs to also convince the tax payers that the program is positive and will bring positive impact on Indonesia.
President Director of Bahana TCW Investment Management Edward Lubis said the government needs to send a message to the tax payers who park their funds abroad that it is for their own benefits to take advantage of this program, rather than face legal disputes later on.
The government also needs to prepare investment instruments to lure the funds repatrated back to Indonesia as well as provide clear tax administration and clear tax related with investments. “We do hope the tax amnesty scheme will provide great benefits to the government and the capital market,” he said. (*)