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Small taxpayers targeted
Jakarta Post - August 9, 2016
Mira Lestari, not her real name, is jittery. The 40-year-old is unsure of what to do after hearing news of the government's call to participate and declare wealth under the tax amnesty.
"I don't have a lot of assets, but I do have a few things that I didn't include in my previous SPT [tax return]," she said on Monday, adding that she was worried that the lack of information on those additional assets would take a toll on her finances.
Lucky, 37, a marketing officer at a printing company in Bandung, expressed a similar view, saying he needed further explanations regarding his taxation liabilities.
Their concern is shared by other middle-class people, who are increasingly feeling targeted by the program. Center for Indonesia Taxation Analysis (CITA) executive director Yustinus Prastowo said many such people had confided in him.
"I call this middle-class anxiety. They feel targeted because they are part of the taxpayer target that the government wants to reach. Unfortunately, the government is not trying to reach out to them as it tries to reach out to tycoons."
In an attempt to promote the tax amnesty, the government has held events in three cities: Surabaya in East Java, Medan in North Sumatra and Bandung in West Java. The last event occurred on Monday and two more – in Balikpapan, East Kalimantan, and Makassar, South Sulawesi – are to follow suit.
At each event that was attended by thousands small taxpayers, Jokowi has tried to convince attendees to apply for the tax pardon, declare their wealth and even bring their assets that are kept overseas back to Indonesia, an action referred to as repatriation.
"This is a one-time chance. Those who want to use it, go ahead. Those who don't, be careful," Jokowi stated during the program's launch last month.
The government is hoping to see Rp 1 quadrillion (US$76.08 billion) in repatriated assets. However, as of Monday, repatriated assets stood at Rp 669 billion or just 0.07 percent of the target.
Offshore declarations stood at Rp 1.43 trillion, while domestic declarations amounted to Rp 8.81 trillion. The combined figure was only Rp 10.24 trillion, equal to 0.25 percent of the declaration target of Rp 4 quadrillion.
Tax revenue collection from penalties also remains well below target, standing at Rp 231 billion, while the target has been set at Rp 165 trillion.
Yustinus said the government should offer incentives to the middle class, instead of brandishing possible punishments to coerce them into participating.
Meanwhile, Jahja B. Soenarjo, the deputy chairman of the West Java chapter of the Indonesian Employers Association (Apindo), acknowledged that his colleagues wished to join the amnesty program, but were hesitant over several matters.
"They need investment certainty in Indonesia not only for this year, but also in the future," Jahja said on the sidelines of the tax amnesty event in Bandung.
He expressed hope that the government would not simply save seminars, but also work with private banks to actively approach businesspeople and persuade them to repatriate their funds.
As of Monday, the West Java tax office recorded Rp 458.61 billion in repatriated assets from the total declaration worth Rp 1.41 trillion. Penalty payments, meanwhile, stood at Rp 29 billion.
Concerns over data and information confidentiality remain, although the Financial Transaction Reports and Analysis Center (PPATK), the National Police and the Attorney General's Office (AGO) have signed an agreement that they will not use tax amnesty data or information in any investigation.
The law is also in legal limbo as several groups have filed judicial review petitions with the Constitutional Court to challenge it.
The government has announced 19 banks, 18 investment management companies and 18 securities firms as gateways for fund repatriation. The gateways are financial companies that will serve as the pools and managers of repatriated assets.
"Please go ahead with the repatriation," Finance Minister Sri Mulyani said in Bandung.
Source: http://www.thejakartapost.com/news/2016/08/09/small-taxpayers-targeted.html.
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