JAKARTA. Number of economists and prominent institutions started doubting that tax amnesty program will meet the target set by government. 

BI (the Central Bank) estimated that government will be struggling to achieve the amount of state revenues and repatriation targeted under the tax amnesty program. Of the target of IDR 165 trillion of redemption fees until the end of this year, BI calculated that government can only collect IDR 21 trillion of redemption fees, whereas previously BI predicted that government may gain IDR50 trillion from redemption fees.  It is also predicted that government can only gain IDR 180 trillion of  IDR 1,000 trillion of the target for repatriation funds. 

BI Governor Agus Martowardojo explained that according to BI estimation, the IDR 21 trillion of redemption fees  will be collected during two phases. "In 2016,  the amount of the redemption fees collected  will be amounted IDR18 trillion, and in 2017 will be amounted IDR3 trillion”, he said, Wednesday (7/9) night at a working meeting with Commission XI of  the House of Representatives (DPR).

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This estimation was based on the amount of tax amnesty collected during the first week of September 2016. Until Thursday night (8/9), government could only collect  IDR 15.7 trillion of redemption fees. In the same period, the collected redemption fees only amounted to IDR7.36 trillion or 4.5% of the target of IDR165 trillion.

The amount of redemption fees consists of IDR 801.2 billion collected from non micro, small, and medium enterprises (MSMEs) corporate taxpayers, IDR14.5 billion MSMEs taxpayers, and IDR 377.4 billion from SMEs individual taxpayers. Total declared assets were recorded at the amount of IDR 325.5 trillion. 

In addition to BI, Citi Research is also pessimistic that government can achieve the target of tax amnesty program. In a release received by KONTAN, according to Citi Research until the end of September 2016 obtained redemption fees only amounted to IDR30 trillion – IDR35 trillion. “However, the result is still considered low”, Citi Research said in a statement.

Until the end of the period of tax amnesty implementation, Citi estimates that government may collect amounting to IDR 53 trillion of redemption fees, and collect IDR 1,700 - IDR 2,200 trillion of declared assets. 

The amount of tax amnesty revenues collected by government increased faster in September 2016 compared to the first two months of tax amnesty implementation. This is normal, since September is the last month of the first period of tax implementation that offers 2% rate (the lowest rate) of redemption fees for repatriation and domestic assets declaration , as well as 4% of redemption fees for overseas assets declaration.

Extra time

The low amount of collected ax amnesty revenues redemption fees and repatriation funds has prompted some parties to suggest government to extend the first period of tax amnesty. Executive Director of the Center for Indonesian Taxation Analysist (CITA) Justin Prastowo said that extra time will give an opportunity to taxpayers who are still preparing the registration requirements.  

Justin proposed an extension of time for two months after the first period reaches the due date.

Member of Commission XI of the House of Representatives (DPR) from PDI-P faction Indah Kurnia also suggested the extra time. In addition to the suggestion of an extension of time, Indah also  questioned the government anticipatory measures if tax amnesty program fails to meet the expected target. 

However, Minister of Finance  Sri Mulyani asserted that government has not yet considered the  time extension option. She said that there is no room to adopt the option, since the duration of tax amnesty program is regulated under Law on Tax Amnesty. (Translator: Muhammad Farid)