After Tax Amnesty Law, Gov’t to Revise 3 More Laws

Photo Caption: President Jokowi talks with Cabinet Secretary Pramono Anung at the dissemination of Tax Amnesty in Semarang (9/8)

The issuance of Law Number 11 of  2016 on Tax Amnesty will be followed by the revision of Laws on Value Added Tax (VAT), income tax (PPh), particularly for business entities, and Law on the General Provision and Tax Procedures (KUP).

The statement was delivered by President Joko ‘Jokowi’ Widodo in response to a participant’s opinion on a lower tax rate in the Tax Amnesty dissemination on Tuesday (9/8) at the Rama Shinta Ballroom, Patra Jasa Semarang Convention Hotel, Semarang.

“If tax rate in Singapore is 17 percent, how come tax rate in Indonesia is 25 percent? We want to compete but people will fly to Singapore considering the lower tax rate,” President Jokowi said and giving example why the Government considers to lower tax rate.

Currently, the Government is still calculating whether they can lower the tax rate from 25 to 17 percent at one blow, or it can be done gradually, from 25 percent to 20 percent, and finally 17 percent.

“If other countries can do it, then we can,” the President firmly said.

“People will avoid the tax, if the rate is high. Rather than being used by irresponsible groups, it will be better if the Government lower the tax rate. Everything will be easier, inexpensive, and transparent. Moreover, business sector will be rejuvenated,” one participant in the event said.

On that occasion, President Jokowi said that in the era of competition, Indonesia has to make changes and adapt swiftly because without it Indonesia will be left behind by other countries.

The President went on to say that the Government still collects inputs from many parties to consider the measure to be decided and took.

“Insya Allah, it will finish next year,” the President added.

Although the revision of three laws needs to be discussed in the House of Representatives (DPR), President Jokowi believes members of the DPR will support the process.

Besides the laws, the Government is currently exploring the possibility of developing one island in Indonesia to become a tax heaven, as Labuan in Malaysia.

“We have many islands, why don’t we turn one island into a tax heaven. The idea is still on process,” the President stated.

In a question and answer session hosted by the Directorate General of Taxation of the Ministry of Finance Ken Dwijugiasteadi, Minister of Finance Sri Mulyani explained that President Jokowi provides an ease by applying tax amnesty.

“As the one mentioned in the Tax Amnesty Law saying that the Government will stop the investigation once the taxpayers fill in all of their wealth into Annual Tax Assessment (SPT) through tax amnesty program.

However, Sri reminded all not to report some of the wealth and requesting a termination of investigation.

“I don’t want someone reports 10 percent of his/her wealth in order to stop the investigation. It will betray the President’s trust,” the Minister added.

On that occasion, the Minister also called on all participant to support the Government’s policies, not only by present here, or using the facilities.

“This is such a serious matter that will improve the country. The statement delivered by the President is like fresh air, but this is also your obligations as citizens,” the Minister concluded, reminding all that paying taxes is one of citizen’s obligations. (RMI/DID/OJI/ES) (RAS/EP/YM/Naster)