Police Reassure on Data Secrecy After Slow Start to Tax Amnesty
Jakarta. The National Police have reiterated a guarantee that investigators would refrain from accessing prospective taxpayers' information, after a slow start to the government's tax amnesty program.
National Police chief Gen. Tito Karnavian said he instructed officers not to use tax amnesty information to launch investigations against taxpayers.
"The police need to assist and ease the way for tax officers and taxpayers in their efforts to declare or repatriate assets," Tito said. "The police also need to maintain a safe investment environment so that it is convenient for taxpayers to invest here."
While the Tax Amnesty Law does not grant immunity for crimes other than tax dodging, it forbids the state from using tax information as initial proof for launching criminal investigations. The law also does not allow law enforcers to obtain the tax records of any particular taxpayer, except with the taxpayer's consent.
Law enforcers must look for proof elsewhere to catch corruptors, human traffickers and drug dealers who may repatriate their assets under the program.
Finance Minister Sri Mulyani Indrawati, who was reappointed in the post on Wednesday (27/07), said law enforcers need to have a common understanding that any disruption of the government's tax amnesty program could pose a risk to the country and to an economic recovery.
"The president wants to improve economic growth in order to create jobs and eradicate poverty and inequality. It is necessary for economic activity in the form of investment. We need [tax amnesty] as a source of funds to finance economic activity," the minister said.
However, in spite of all the guarantees and encouragement, only Rp 1.8 trillion ($100 million) in assets were declared by 292 taxpayers, in the first two weeks of the tax amnesty program.
The program aims for assets worth Rp 4,000 trillion to be declared – with Rp 1,000 trillion of that being repatriated – by March 31 next year. That translates to an average of Rp 16 trillion in assets that need to be declared per day to meet the target.
The government seeks to collect Rp 165 trillion in additional tax revenue and save the 2016 state budget from a disastrous shortfall.
The slow start was understandable with many tax offices unable to provide detailed information on the tax amnesty and seamless services to prospective taxpayers. However, tax directorate general spokesman Hestu Yoga was confident that tax collection would only pick up from here.
"The main point is that we ensure confidence and convenience for the participating taxpayers," Hestu said. "After all, they do not have many choices left with worldwide banking data openness coming in 2018, which will make it hard for anyone to hide their assets."
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