The tax amnesty ended yesterday. The Directorate General of Taxation will now focus on law enforcement and supervise the commitments of the tax amnesty participants.
There are several notes that we can take from the three periods of the implementation of the tax amnesty. From the declaration of assets and penalty payments, it can be said that it was quite successful: the highest compared to other countries that have held similar programs. Its figures exceeded the expectations of many people and the government.
However, the value of the declarations and penalty payments is not the only measure the program’s success. The other no less important measures include the amount of repatriated funds, the level of participation of taxpayers, the number of new taxpayers and tax reform.
Both the amount of repatriated funds and level of participation are below the target. Of the repatriated target of Rp 1 quadrillion, only Rp 146 trillion (14 percent) was realized. In terms of participation, there were about 832,000 program participants, far lower that the number of taxpayers estimated to reach about 36 million or 60 percent of heads of families who should have a tax identification number (NPWP). The number of new NPWP holders at 44,000 is also below target.
In terms of tax reform, aside from managing the tax data and system and new taxpayers, the success of the tax amnesty can also be measures by the success of efforts to raise awareness on the importance of paying taxes to finance the development of society, since taxes account for 75 percent of the state budget.
On the one hand, the achievement of the program reflects high public confidence in state institutions. Hopefully, the government does not waste the trust given. However, we are not closing our eyes to the several weaknesses in the implementation of the program.
The fact that the program has not been optimal, among others, is caused by the lack of familiarization and the lack of readiness of institutions in the country in utilizing the funds from the amnesty revenues. As a result, more funds are put in banks, not for productive investments. The government wants to further boost the economy, job creation and develop financial independence.
We hope that this amnesty achievement can become a basis for the government to continue tax reform more thoroughly.
For taxpayers that did not take advantage of the amnesty, they will face being pursued by tax officials, whose authority and scope are now strengthened by a government regulation in lieu of law and cooperation in the Automatic Exchange of Information (AEOI).
After the amnesty, the government should pay more attention to create a conducive climate for investment and placement of funds to attract overseas assets owned by Indonesian citizens, including in the favorite countries where the citizens save their wealth, such as Singapore.