Editorial Notes

Questioning Indonesia's tax amnesty, Myanmar's political progress and KMT Chairman Chu's leadership

Editorial Notes is a selection of editorials from newspapers in the Asia News Network (ANN).

1. Will Indonesia's tax amnesty really bring in the money? 
In its editorial on June 28, 2015, The Jakarta Post questions if the proposed tax amnesty bill will encourage businessmen to bring in funds parked abroad.  

The Jakarta Post/ANN

A statement by Finance Minister Bambang Brodjonegoro earlier this week was a shock to many. The government’s intention to deliberate a tax amnesty bill sounds absurd, if not impossible. The bill would allow financial crimes, from corruption to money laundering to tax evasion, to be exempted from all criminal and financial charges, in exchange for the beneficiaries repatriating their assets.

He explained that the amnesty bill would stand alone, separate from a bill on the revision of the General Tax System (KUP) Law, which is set to be submitted to the House of Representatives for deliberation this month. The amnesty bill will be deliberated after the completion of the KUP revision. The government, he said, saw an opportunity to bring back some of the estimated thousands of trillions of rupiah of Indonesian assets, particularly in Singapore, and “lock them here” to generate jobs and bolster economic activities. 

The idea of a tax amnesty has been in and out of public policy debate for a decade. The 1998 political and economic crises caused many Indonesian conglomeration members to move billions of dollars of financial assets overseas, mostly to Singapore. 

Quoting a study by McKinsey, Bambang estimated the amount of assets parked by Indonesians in Singapore alone at Rp 4 quadrillion (S$405 billion). President Joko “Jokowi” Widodo’s cash-strapped administration has the Herculean task of boosting tax revenues by 30 percent to realise large-scale infrastructure projects that are hoped to boost the economy by 7 per cent by 2019, from 4.7 per cent in the first quarter this year, the lowest level in six years.

Although the idea seems noble, there are many questions being raised, particularly on the fairness and justice for those who earned their whopping wealth from corruption and money laundering.

Do we still believe that justice exists, if the government itself launches such an idea?

Will such a move help the government bring back the money?

We doubt it will. And we hope President Joko “Jokowi” Widodo will have second thoughts before implementing this policy. There are so many what ifs and too many concerns that this policy may backfire. Instead of bringing back home the funds, Jokowi’s administration could be accused of allowing corruption and therefore he will lose more trust from the people who voted for him. 

Many feared the plan could potentially create a “moral hazard”. Yustinus Prastowo, executive director for the Center for Indonesia Taxation Analysis (CITA), said that if the plan materializes, Indonesia would be the first to implement a tax amnesty that pardons politically sensitive crimes such as corruption and money laundering.

An economist from BNP Paribas, Philip McNicholas, warned about the risks of “legitimising corruption”, which could “damage the Jokowi administration’s credibility and popularity and ultimately hurt the President’s capacity to deliver on his reform agenda”.

Jokowi should remember that his constituents voted for him, believing that he would make badly needed changes — but not at the cost of pardoning those who have evaded taxes and stole public money.

2. Clock has turned back, four years after Suu Kyi's release  
In its editorial on June 27, 2015, The Statesman argues that Aung San Suu Kyi has seemingly reached a dead-end and the whiff of democracy in Myanmar has turned out to be shambolic. 

The Statesman/ANN

Barely six months ahead of the national elections - in which the lodestar of democracy was expected to contest for President - Parliament has distinctly batted for the junta. It has rejected attempts to amend the Constitution, a decision that at once puts Suu Kyi’s prospects under a cloud.  Without conceding a moral “defeat”, she has responded with tongue firmly in cheek : “The people knew the result they would get. 

Democracy has suffered yet another jolt, four years after she was released from incarceration. This is the subtext of the parliamentary vote that the Western powers ought now to realise, most particularly America which was overly anxious to end Myanmar’s isolation. Not that Thursday’s legislative outcome was wholly unexpected; with 25 per cent of the seats reserved for the military, there was always an inherent uncertainty in the essay towards a constitutional amendment.  

Its formal rejection is a grim reflection of the realities of  the power structure four years after the purported transition from military to democratic rule.  Actually it wasn’t.  Ergo, suspicions that Suu Kyi might have allowed herself to be used as a pawn in the “Great Game” between the USA and China are not wholly unfounded.

Notably, she was encouraged to visit both countries, most recently the mission to Beijing.  No  less  crucially  and  in  her  anxiety  not  to  rock  the  applecart  before  the  elections,  she  stopped  short  of  speaking  on  behalf  of  the persecuted Rohingyas.  In retrospect, the astute icon of democracy ought to have seen through the junta’s bluff much earlier.  The attitude of army headquarters turns out to be as deceptive as the sartorial change from the uniform to the longyi.

The Constitution of  2008  was sought to be amended in terms of  two crucial clauses - allowing a candidate with a foreign spouse or relatives to run for President; and cutting the parliamentary majority needed to change the Constitution. The first clause is believed to have been crafted specifically to bar Suu Kyi, whose husband was British.

The second stipulates that the support of more than 75 per cent of MPs is required for a constitutional amendment to be passed. This has been precluded by the fact that 25 per cent of them are uniformed military representatives.  The junta has had its way, just as it did during the heyday of the movement for democracy.  

Reaffirmed is the rule of the generals behind a facade of civilian authority. The clock has been turned back. It is the way history often works. 

3. Stakes high for KMT Chairman Chu in Taiwan's election 
In its editorial on June 28, 2015, The China Post says that the party chief may have been seen as a saviour till recently but a fresh battle looms 

The China Post/ANN

Hung Hsiu-chu is almost certain to become the candidate representing the ruling Kuomintang (KMT) in next year's presidential election. But running parallel to the presidential election will be another race between Hung and KMT Chairman Eric Chu for control of the party. 

When a single person takes both positions, there won't be any problem. That was the case with President Ma Ying-jeou before he resigned as KMT chairman to take the blame for the party's crushing defeat in the November local elections.

Ma has since become a lame duck, and in sharp contrast Chu has been looked upon as the "savior" of the party until recently. But Ma apparently has never stopped trying to exert his influence on the running of the party, particularly in the selection of its presidential candidate.

It has been said that Chu wanted Legislative Speaker Wang Jin-pyng to represent the party in the race, but Ma, who sees the parliamentary leader as the major obstacle to implementing his reform, was working against his nomination.

Whatever happened behind the scenes may never be confirmed, but the dark horse, namely Hung, is clearly on course to become the KMT presidential candidate, only pending formal confirmation of her nomination by the party congress.

The failure to have Wang represent the KMT is one of the first signs that Chu has not been in tight control of the party. He has yet to establish an authority immune to challenges.

Ma's manipulation may have not gone public, but Chu is now facing open challenges from someone who is threatening to take over his authority completely. There have already been open conflicts between Chu and Hung.

Chu last week said that the party would arrange for Hung to visit the United States — an arrangement that Chu thought necessary in the wake of the recent U.S. trip that Tsai Ing-wen, the presidential candidate of the Democratic Progressive Party, went on.

But Hung did not hide her reluctance to go on such a trip. She asserted the party was not in a position to arrange such a trip for her. And she further dismissed the party's authority in outlining a discourse for her cross-strait platform, maintaining that she was the only one who would be responsible for writing her own Taiwan-China policy.

It is not just embarrassing for the KMT chairman; it is also a warning, giving him a glimpse to what it would be like if Hung becomes president. It is believed that Hung originally did not really mean to go for the presidency. But now she is taking over Chu's role as the "savior" of the party.

Chu has openly declared support for Hung, but the KMT chief must perfectly understand the implication of her nomination.

If she wins, Chu will hardly be able to take credit for her victory. It will be a winner-takes-all situation: the chances of her taking over the KMT leadership will be also high — an arrangement that is usually made to facilitate the coordination and management of both party and government.

Of course, Chu would stand a good chance of becoming premier. But in many cases, the chief of the ruling party has more influence than the premier. That is exactly the current situation inside the KMT and the government.

And if Hung becomes president, Chu would have to wait at least eight years before he could mount a bid of his own for the presidency. 

If Hung loses, Chu will definitely have to take the blame. Supporters would blame him for his indecisiveness over the nomination process, for his refusal to represent the party in the election, and for his inability to field the strongest possible candidate.

The pressure for him to resign as party chief will be particularly high if the party also suffers a defeat in the legislative elections taking place simultaneously.

Ironically, although Chu is not running, the stakes for him are high. Some of his supporters are said to be still trying to maneuver for him to replace Hung as the KMT  candidate.

But the nomination process has come to a point of no return, whereby any backpedaling would create substantial damage to the party.