Indonesia Finance Ministry says will consider another tax amnesty

Last month, Indonesia Finance Minister Sri Mulyani Indrawati told Parliament the government predicted a 134.3 trillion rupiah shortfall in revenue collection this year, largely due to sluggish tax revenue growth.
Last month, Indonesia Finance Minister Sri Mulyani Indrawati told Parliament the government predicted a 134.3 trillion rupiah shortfall in revenue collection this year, largely due to sluggish tax revenue growth.PHOTO: REUTERS

JAKARTA (REUTERS) - Indonesia might again offer a tax amnesty but it is aware of shortcomings of the one launched in 2016, media quoted Finance Minister Sri Mulyani Indrawati as saying on Friday (Aug 2).

South-east Asia's largest economy offered a pardon for tax offenders in exchange for low penalty rates for nine months ending in March 2017.

Jakarta's amnesty was regarded as among the world's most successful due to the size of assets declared and the revenue generated, but some also criticised it for failing to significantly widen Indonesia's narrow tax base.

The programme unearthed assets worth US$330 billion (S$454.29 billion) and added 135 trillion rupiah (S$13.24 billion) to state coffers, with less than one million taxpayers participating.

Media outlets said when asked at a forum about a repeat of the tax amnesty, Ms Indrawati said it's possible, though she also said she feared a second one might encourage more tax avoidance.

President Joko Widodo had also asked Ms Indrawati for her view on a second amnesty after receiving requests from those who missed the first one, Kompas.com reported the minister as saying.

The Organisation for Economic Cooperation and Development (OECD), in a report earlier this year, said Indonesia has the lowest tax-to-GDP ratio in Asia-Pacific.

Last month, Ms Indrawati told Parliament the government predicted a 134.3 trillion rupiah shortfall in revenue collection this year, largely due to sluggish tax revenue growth.

In October 2016, during the amnesty programme, the OECD suggested Indonesia tell taxpayers there would not be further amnesties, to discourage evasion.