TAX TO AMNESTY - KEY DEVELOPMENT

Information disclosed during the amnesty program could not be used as grounds for criminal investigations, prosecutions, or other criminal charges against the taxpayer, whether for tax crimes or other criminal sanctions. This provided significant legal protection.

- Ravi Saini

Here are the key details of the 2016 Indonesian Tax Amnesty scheme:

1.Objectives:

Increase Tax Revenues: A primary goal was to generate significant tax revenue for the state budget.

Broaden the Tax Base: By encouraging the declaration of previously undeclared assets and income, the government aimed to bring more taxpayers into the formal tax system.

Accelerate Economic Growth: Repatriated funds were expected to be invested in Indonesia, stimulating domestic liquidity, improving the Rupiah's exchange rate, decreasing interest rates, and boosting investment.

Improve Tax Compliance: The program sought to foster a culture of voluntary tax compliance.

2. Eligibility:

Generally, all taxpayers, both individuals and corporations, were eligible to participate.

Exceptions: Taxpayers undergoing criminal investigations, court proceedings, or serving criminal sentences for tax crimes were typically excluded.

3. Key Features and Benefits for Participants:

Waiver of Tax Dues and Sanctions: Participants received a waiver of tax due, administrative sanctions, and criminal sanctions for all tax obligations up to the latest fiscal year (which ended within January 1 – December 31, 2015), for which no assessment letters had been issued. This included income tax, value-added tax (VAT), and a tax on luxury goods sales.

Reduced "Redemption Money" Instead of paying the full tax amount, participants paid a significantly lower "redemption money" based on the declared net assets (assets minus liabilities). The rates varied depending on:

Submission Period: Lower rates were offered for earlier declarations. The program was divided into three periods:

July - September 2016

October - December 2016

January - March 2017