Indonesia tax amnesty collects $7.45 billion as Indonesians rushed to get best terms

Indonesia's President Joko Widodo said the response to tax amnesty "serves as momentum for us to reform our taxation system, increase our tax base and increase our tax ratio."

By: Reuters | Jakarta | Published:October 1, 2016 11:02 am
indonesia, indonesia tax amnesty, indonesia revenue, indonesia tax exemption, indonesia news, world news The Indonesian government applies a tax amnesty law aimed at drawing billions of dollars from wealthy Indonesians abroad and from tax evaders at home to help finance infrastructure and boost economic growth. (Source: AP Photo)

The first phase of Indonesia’s tax amnesty, which tens of thousands joined on the final days, collected 97.2 trillion rupiah ($7.45 billion) in revenue to help cover the government’s fiscal deficit, Finance Ministry data showed on Saturday.

Some 366,757 taxpayers, including some of the wealthiest individuals in Southeast Asia’s largest economy, signed up for the first phase that concluded on Friday, the ministry’s website said. They declared assets worth a total of 3,620 trillion rupiah, with 137 trillion rupiah pledged to be repatriated to Indonesia, it said.

Last week, and in particular on Friday, citizens thronged tax offices to take advantage of the lowest penalty rate of 2 percent on previously unreported assets. The penalty rate rises 1-2 percentage points from Saturday and will go higher on Jan. 1, for the amnesty’s third and final phase, which ends on March 31. President Joko Widodo visited Jakarta’s main tax office on Friday night.

The response to the amnesty “serves as momentum for us to reform our taxation system, increase our tax base and increase our tax ratio,” he told reporters. Finance Minister Sri Mulyani Indrawati called the first phase results “encouraging”. Government officials set a target of collecting 165 trillion rupiah in revenue. The first-phase total reported on Saturday is 59 percent of that figure.

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