Indonesia tycoons line up for tax amnesty in boost for plan

JAKARTA (BLOOMBERG) - Two of Indonesia's wealthiest men said they will participate in a government-led tax amnesty to clear their past omissions, boosting the credibility of the program.

James Riady, the son of Lippo Group's founder, arrived at the Jakarta tax office Friday to take part in the plan, according to his spokesman Danang Kemayan Jati. Mr Tahir, the founder of PT Bank Mayapada International who goes by one name, said by phone his family will submit documents this month to support the program.

"If a big fish like Riady joins the program in a public way, that lessens the restraint for everybody else to follow suit," said Wellian Wiranto, an economist at OCBC Bank in Singapore. "We have seen the momentum start to build, so things are starting to look up for the tax amnesty."

President Joko Widodo has staked his credibility on a program that the government estimates will bring in 165 trillion rupiah (S$17 billion) in revenue. He ordered his cabinet to summon the biggest taxpayers, especially those with assets held overseas, to ensure they participate. Since the amnesty began in July, the finance ministry has earned 4 trillion rupiah in penalty fees, or 2.4 per cent of the target.

Lippo Group is a conglomerate founded by Mochtar Riady in the 1950s with stakes in property developer Lippo Karawaci, healthcare company Siloam International Hospitals and retailer Matahari Department Store. It also has stakes in Singapore-based First Real Estate Investment Trust and Lippo Malls Indonesia Retail Trust.