JAKARTA • Indonesia's government has issued new regulations aimed at tracing and taxing the wealth of taxpayers who were not pardoned in the nine-month tax amnesty that ended in March.
Around 972,000 taxpayers joined the amnesty programme and declared assets worth a total of 4,881 trillion rupiah (S$496 billion). About 24 per cent of that was held offshore, mostly in Singapore, and only a small percentage of it was pledged to be brought home. Under the amnesty scheme, generous tax rates from as low as 2 per cent to 10 per cent were offered.
President Joko Widodo vowed last year to implement a "tax law enforcement" programme this year following the amnesty.
But the government later acknowledged that tax amnesty declarations and the pledged repatriation of offshore assets to Indonesia did not correspond to data it had on taxpayers' foreign holdings.
The government said it had also detected onshore assets that were not reported under the amnesty and had not been obtained with taxed income.
The regulations call for all assets that were not reported or misreported in the amnesty programme, and which were obtained between Jan 1, 1985 and Dec 31, 2015, to be treated as untaxed income. The estimated value of the undeclared assets has not been made public.
If the assets are found by the authorities before July 1, 2019, they will be subject to a final income tax of 30 per cent for individuals, 25 per cent for companies, and 12.5 per cent for special cases.
972k Number of taxpayers who joined Indonesia's amnesty programme.
Indonesia's government has granted the tax authorities wider access to information on customer accounts at banks and other financial institutions.
Next year, the tax office will get data on Indonesian taxpayers' assets kept in jurisdictions that are signatories to the Organisation for Economic Cooperation and Development's (OECD) Automatic Exchange of Financial Account Information in Tax Matters.
Finance Minister Sri Mulyani Indrawati has previously said Indonesia's tax-to-gross domestic product ratio of below 11 per cent was "hard to swallow", and she was committed to raising it to 16 per cent by 2019. The average tax-to-GDP ratio among OECD countries is 34.3 per cent.