Jakarta. Indonesia’s Directorate General of Taxes has gained much-needed confidence to push on with its flagship tax amnesty program after a number of big names in Indonesian business publicly announced they have signed up for the program, a Finance Ministry expert staff said on Friday (02/08).
"Thank God, this is nearly a miracle," Puspita Wulandari, a tax supervision expert at the Finance Ministry, told reporters.
She said news about Lippo Group chief executive James Riady and former chairman of the Indonesian Employers Association (Apindo) Sofjan Wanandi joining the program on Friday was a good start and is expected to encourage his fellow businessmen to follow suit.
Puspita made her comment on the side of James’ visit to a tax office in Jalan Sudirman, South Jakarta, to announce his participation in the tax amnesty program.
Both James and Sofjan declared their overseas assets and made a commitment to repatriate them, though they did not mention the amount of their declared assets.
Promising investment climate
James, the chief executive of Lippo Group, said Indonesia and the United States remain the two countries in the world most promising for investment.
James said Indonesia offers a more competitive investment climate than Europe, China, Japan or even India.
"In my opinion, I am sure most [businessmen] will want to put their assets here. This is the beauty of the current structural reform. There is no need to park assets overseas that only give low returns. [Assets] invested in Indonesia promise a bigger return and at the same time, they can be used to contribute to the nation's development," James, whose Lippo runs a craddle-to-grave business, said.
James hinted that for Lippo Group the repatriated funds will be spent on much needed investment in infrastructures, education, healthcare, logistics, retail and property.
James said he was buoyed by President Joko Widodo's commitment to boost infrastructure development, making now the best time for investors to invest in the country.
"I went to Papua for the first time in 1990. The previous administrations had also pledged to develop Papua. But this time, I witnessed it myself when I went there recently, development is really being pushed in the region," James said.
According to the Directorate General of Taxes's online dashboard on its official website, the government has so far received Rp 4.1 trillion in tax as a result of the program, or 2.5 percent of its Rp 165 trillion target in additional tax revenue from the tax amnesty.
"So far, 51 major taxpayers have handed their Asset Declaration Letter for Tax Amnesty. We have at least 10 days [to answer the proposal] and we’ve already issued 38 Tax Amnesty Approvals," Mekar Satria Utama, the Directorate General of Taxes regional office head, said.
Finance Ministry Sri Mulyani Indrawati previously said she expects participation in the program will peak in September when the deadline to get the cheapest tax amnesty rate falls (on Sept. 30).