Tax Amnesty Targets Wealthy People, Finance Minister Says

Minister of Finance Sri Mulyani in a working meeting with Commission XI of the Indonesian House of Representatives on Wednesday (31/8), in Jakarta

Minister of Finance Sri Mulyani Indrawarti said she understands public concerns in the implementation of tax amnesty program. According to her, although the program targets wealthy taxpayers with capital or assets abroad, Law Number 11 of 2016 on Tax Amnesty applies for all Indonesian people.

“The spirit is for wealthy taxpayers and to repatriate assets abroad to Indonesia. But it was not mentioned when we formulated the Law,” Sri Mulyani said in a working meeting with Commission XI of the Indonesian House of Representatives on Wednesday (31/8), in Jakarta.

When the law is enacted, it will apply to all Indonesian people who have rights and obligations as Indonesian citizens whether it is intended or not, she said. “It is mentioned that tax amnesty program is a right. Therefore, I know how people feel” the Minister added.

However, the Minister asserted that the tax amnesty program prioritizes wealthy taxpayers who have never complied with tax liabilities properly.

“Therefore, I have instructed the officials of the Ministry of Finance, particularly the Directorate General of Taxation to prioritize wealthy taxpayers,” Minister Sri added.

The Minister admitted that though the Tax Amnesty Law does not state that tax amnesty program only applies to taxpayers having capitals or assets abroad, the program must be implemented by upholding the principle of justice.

“We implement it in accordance with the mandate of the Law. We have received feedback to be more focused on wealthy taxpayers, and also on person or entities that are considered to have huge potentials in evading taxes. That is what we do,” the Minister said.

Therefore, she hopes public concerns against the implementation of this program will cool down because the main target of tax amnesty is not middle class and small people.

Previously, Directorate General of Taxation of the Ministry of Finance has issued Regulation of Directorate General of Taxation Number 11/PJ/2016 on the Implementation of Law Number 11 of 2016 on Tax Amnesty in responding to public concerns.

The Regulation states that person that having income below taxable limit in the Last Fiscal Year such as farmers, fishermen, pensioners, Indonesian Migrant Workers (TKI), or subject of an undivided inheritance tax may not use their rights to apply for tax amnesty.

Based on Finance Minister Regulation Number 101/PMK.010/2016, taxable limit for taxpayers who are unmarried is Rp54 million per year. Meanwhile, taxable limit for taxpayers who are married without children is Rp58.5 million per year, and Rp67.5 million for taxpayers who are married with two children. (*/ES) (RAS/EP/YM/Naster)