JAKARTA ― Indonesia is considering the possibility of a new tax amnesty program, a senior lawmaker said on Tuesday, which would be the country’s third in the past decade despite criticism that repeatedly offering the relief could lead to more tax avoidance.
Mukhamad Misbakhun, head of the parliamentary commission overseeing finance affairs, said there were no details on the plan so far and lawmakers would begin discussions with the government.
Southeast Asia’s largest economy carried out tax amnesty programs in 2016 and 2022, when Joko Widodo was president.
Taxpayers were offered lower-than-normal tax rates if they disclosed unreported assets, while authorities pledged to penalize those who did not participate. The two programs uncovered more than $340 billion worth of assets.
Widodo had pledged not to offer another amnesty, amid criticism it could encourage tax avoidance as people might wait for another amnesty instead of paying taxes correctly.
President Prabowo Subianto, who took office last month, did not discuss a tax amnesty during election campaigning, but he has promised to increase revenues.
Prabowo wants to increase the country’s tax ratio to 18 percent of gross domestic product from around 10 percent, which is among the lowest in the Asia-Pacific region.
“This is a new government,” Misbakhun told reporters when asked about the criticisms of repeated amnesties.
“We can discuss the amnesty in the context of a regular program, while still educating the taxpayers to still comply.
However, at the same time we must also provide a program for past mistakes so that they do not avoid taxes all the time without a way out,” he added.
Fajry Akbar, a researcher with the Center for Indonesia Taxation Analysis think tank, said he doubted the new initiative would bring huge revenues as most of the big conglomerates have already participated in past programs.
“If there is another tax amnesty, this is a step backward. Especially at the same time the government is planning to hike the value-added tax next year. I believe the people will get angry. It’s really an absurd policy,” he added.
Indonesia is expected to hike the value-added tax starting Jan. 1 by one percentage point to 12 percent from the current 11 percent.
The planned hike has been criticized by lawmakers, business groups and economists, who demanded a delay because it could reduce people’s purchasing power.
The finance ministry did not respond to a request for comment.
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