President Jokowi Instructs Ministers to Disseminate Tax Amnesty Law
Date 28 Juni 2016
Tax Amnesty which was passed by the House of Representatives on Tuesday (28/6) needs to be disseminated to all sides that still keep their money abroad.
The statement was delivered by President Joko Jokowi Widodo after a communal fast-breaking with thousands of orphans and disabled people on Tuesday (28/6) at the Bogor Presidential Palace.
I also gave 1 to 2 days deadline to my ministers, Governor of Bank Indonesia, and Chairman of the Financial Services Authority (OJK) to discuss and prepare several investment instruments to collect money that Insha Allah will enter our country, the President said.
The instruments may take form of Government Securities (SBN), mutual fund units (reksadana), Government Debt Paper (SUN), and direct investments, President Jokowi added.
On that occasion, the President also expressed his gratitude for a decision in the House of Representatives Plenary Meeting which has ratified Tax Amnesty Bill into Tax Amnesty Law.
We hope the capital inflow can be used to complete the existing infrastructures development projects, the President firmly said.
Therefore, infrastructure bond that accommodates for the money entering the country will be issued. The Government hopes the money can enter to the portfolio, be it in the forms of SBN or bond, and it can be used to fund the national economic development within several months. That is our hope, the President added.
President Jokowi admitted that it is not easy to calculate the amount of capital inflow from the tax amnesty because it has to do with the psychology.
Once we have the legal basis, capital inflow will enter our country well because they feel secure. We hope the Tax Amnesty Law can be a legal basis to make the money which have been kept abroad to enter our country, President Jokowi said.
With Tax Amnesty Law, tax payers who have not reported their taxes yet will get lower compensation tariff. There are three categories of the tariff, among others, for Small and Medium Enterprises (SMEs), people wishing to repatriate their funds, and people who declare their wealth without repatriate their funds.
Small and Medium Enterprises with assets worth up to Rp10 billion will get 0.5 percent of compensation tariff, while those with assets exceeding Rp10 billion will get 2 percent.
Meanwhile, people wishing to repatriate their funds will get 2 percent of compensation tariff for the period of July-September 2016, 3 percent for the period of October-December 2016, and 5 percent for the period of January-March 2017.
People who declare their wealth without repatriate their funds will get 4 percent of compensation tariff for the period of July-September 2016, 6 percent for the period of October-December 2016, and 10 percent for the period of January-March 2017.
For the record, the Tax Amnesty Law takes effect until March 2017.
Coordinating Minister for Human Development and Culture Puan Maharani, Minister of State Secretary Pratikno, and Minister of Social Affairs Khofifah Indar Parawansa also attended the event. (BPMI/UN/ES) (RAS/EP/YM/Naster)