Gov’t Instructs Finance Minister to Explain Tax Amnesty Program in Details

Photo Caption: Cabinet Secretary Pramono Anung responds to reporters’ questions after the inauguration of General Elections Commission (KPU) Commissioner Hasyim Asy’ari on Monday (29/8), at the State Palace, Jakarta

Directorate General for Taxation and Ministry of Finance should respond to public concern regarding the implementation of tax amnesty program, Cabinet Secretary Pramono Anung said.

However, Pramono asserted that the tax amnesty program shall be carried out because President Joko ‘Jokowi’ Widodo have stepped into that matter.

Responding to public concerns, Pramono said that the spirit of tax amnesty is repatriation and declaration for people who never pay their taxes, not for those who pay their taxes regularly.

“People who pay their taxes regularly will not become the target of the program. Instead, people who avoid paying taxes eventhough the amount of taxes is not big and use the tax amnesty program as an opportunity to declare their wealth will become the target,” Pramono told the reporters after attending the inauguration of General Elections Commission (KPU) members for the period of 2012-2017 on Monday (29/8), at the State Palace, Jakarta.

Pramono added that the spirit of tax amnesty is to repatriate capital and assets held abroad to the country for the sake of Indonesia’s development.

The Government has also prepared several tools and measures to improve laws on taxation. For example in the law on income tax (PPh), particularly for business entities, double taxation of dividend must not occur, and so on.

“If we can do that, I believe our economy and taxation will be healthy, and it will widen our tax bases,” Pramono said.

Therefore, to end the public concerns, the President on behalf of the Government will immediately instruct Ministry of Finance and Directorate General for Taxation to clarify the matter so that public concerns will not spread.

“Thus, once again, the spirit of tax amnesty is to repatriate and declare capital abroad to Indonesia; and it indeed takes time. Hopefully, capital abroad entering Indonesia will increase in September,” Pramono explained.

However, Pramono dismissed the opinion saying that tax amnesty program starts to miss the target.

“The program does not miss the target; there is someone who use the rumor for political issue. I have read about it. The Government also instructed Directorate General for Taxation to anticipate the rumor, do not let the rumor spreads to wider public. The Government knows about it and will follow it up,” Pramono firmly said.

Responding to people’s petition on tax amnesty, Pramono said that the Government is ready to counterattack those whose behind it.

Pramono added that the President has asked his officials not only at echelon I, but also at ministerial levels to attend the judicial review in the Constitutional Court.

Will tax amnesty law apply to everyone?

“The law must not discriminate anyone, but the explanation and academic paper of tax amnesty law state that the main target of the program are taxpayers who never report all of their wealth, particularly those who are very wealthy (have huge amount of capital abroad),” Pramono concluded. (FID/ES) (RAS/EP/YM/Naster)