Indonesia's Joko Widodo promotes tax amnesty on first road show trip

Indonesia's President Joko Widodo said that the government guarantees that no information submitted will be used to prosecute anyone. PHOTO: AFP

President Joko Widodo has assured Indonesians that information submitted under the new tax amnesty will be held in strict confidentiality and that anyone found to leak the information will face a five-year jail term.

He also added that the government guarantees that no information submitted will be used to prosecute anyone.

Mr Joko made his remarks during his first road show trip to promote the tax amnesty on Friday (July 15) where he told a gathering of 2,700 entrepreneurs in Surabaya, East Java that the proceeds from such programme will be used to help fund infrastructure development that will in turn fuel the economy and help the businesses.

In the next 5 years, Indonesia needs to build 4,900 trillion rupiah (S$504 billion) worth of infrastructure projects, while the state budget could only cover the financing of about a third of this cost, Mr Joko explained.

"Those with their money at home may declare it, while if parked overseas they may bring them home. This is a chance for everyone to contribute to the nation," Mr Joko said, as was cited in a statement released by the presidential palace Saturday morning.

Mr Joko also stressed that attracting inflows of funds is a competition among countries that the recent passage of the tax amnesty law came timely.

The Tax Amnesty Bill is the first piece of legislation ratified by a Parliament where Mr Joko has majority support for the first time since taking office in 2014. He has called on errant tax payers to come clean warning them that "this opportunity will never come again as tax amnesty will not be repeated".

The country is hoping that on the landmark tax amnesty will recover billions of dollars lost over decades to widespread tax evasion and in assets hidden overseas by wealthy citizens and businesses.

Once the scheme takes effect, taxes will range from 2 to 10 per cent, depending on how soon individuals declare previously untaxed assets and whether the funds are repatriated to Indonesia.

The new tax amnesty scheme takes effect on Monday (July 18), said Finance Ministry Secretary General Hadiyanto.

The regulations governing the procedures for the scheme as well as the appointment of a receiving bank for the repatriated funds have been completed, while a regulation covering entities that tax payers can invest their repatriated funds will be finished by Sunday, Indonesia's Director General of Taxes Ken Dwijugiasteadi told The Straits Times.

The Finance Ministry will work with Indonesia's embassies in Singapore, Hong Kong and Londo, all offshore tax jurisdictions where wealthy citizens are said to have banked their wealth, to promote the amnesty scheme to the Indonesian diaspora overseas.

Join ST's Telegram channel here and get the latest breaking news delivered to you.