Govt Expects to Finalize Tax Amnesty Law in March
Jakarta. The government expects discussions on Indonesia's tax amnesty bill with the House of Representatives to stretch well into March, leaving the tax office with less time to meet its revenue target this year.
The bill intends to lower the tax rate in order to encourage tax dodgers to come clean and declare their wealth. The policy would boost tax by $4.4 billion this year, according to a Finance Ministry estimations, and provide the tax office with a larger taxpayer database for future taxation.
The government finished its draft amnesty bill last week, and immediately submitted it to the House of Representatives, Suahasil Nazara, the interim head of the fiscal management office at the Finance Ministry, said on Friday. "We may have the law by the end of March," he said.
The tax amnesty bill does not require taxpayers to repatriate their wealth, according to Sofjan Wanandi, the Indonesian Employers Association (Apindo) advisory board chairman who joined the meeting to finalize the draft.
The government would use 2014 as the base year for calculating the tax on any increase in the taxpayers' net wealth.
Taxpayers only need to pay between 1 percent to 3 percent tax on their net wealth increase, but if they refuse to bring their money back home, they would need to pay between 2 percent to 6 percent tax, Sofyan said, as quoted by local business newspaper Kontan.
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