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September 20, 2017

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Indonesia businesses call for more info on tax amnesty

Indonesia -- Small and medium-sized enterprises (SMEs) say they want comprehensive information on tax amnesty before making a decision to join the nationwide program, as longed for by Indonesia's government.

Working non-stop on his calculator and invoices, Edy Bong, 35, a textile wholesaler at the crowded Tanah Abang Market in Jakarta, says that recent declining sales have not affected his willingness to participate in the amnesty.

The country's weak economy has affected his business and caused fluctuations each month, resulting in a minimum monthly turnover of 30 million rupiah (US$2,310) and maximum 60 million rupiah.

However, Jakarta resident Edy still plans to participate in the tax amnesty's second phase that spans from Oct. 1 to Dec. 31, as he did not have enough time to participate in the first phase. He showed no reluctance, claiming it was important to be a compliant taxpayer.

"As a citizen of this country, I think it is an obligation (for me to participate). So, I will certainly join the second phase because I was late in joining the first one," he said on Monday.

Tata, 23, another textile wholesaler at Tanah Abang Market, said she was also willing to participate in the tax amnesty's second phase.

But for both Edy and Tata, information will be key to making sure that the program is as they expect. "I want to participate, but I don't know much about the program," she said.

Lucky for them and thousands of other wholesalers, the Finance Ministry's directorate general of taxation is planning to hold a public campaign on tax amnesty at the Tanah Abang Market next week.

Banners, chairs and desks were being prepared to facilitate the vendors and their employees, as observed by The Jakarta Post on Monday during a one-hour impromptu visit paid by Taxation Director General Ken Dwijugiasteadi.

He was accompanied by businessman Djan Faridz, a United Development Party (PPP) politician who is also the developer of several blocks of the market. Ken visited several shops and exchanged pleasantries with their owners.

"Sir, have you heard about the tax amnesty? Come, Sir, let's join," Ken told one vendor.

The campaign is deemed crucial to get the wholesalers to join the program, considering that the market is the largest textile trade center in Southeast Asia that also records trillions of rupiah in daily transactions.

The government has set Rp 165 trillion in penalty payments as an expected target from the program to help plug this year's widening state budget deficit. As of Monday, total penalty payments stood at 93.7 trillion rupiah, still 40 percent off the target.

The penalty rates — both for declaration and repatriation — are set at 0.5 percent for SMEs with total assets of 10 billion rupiah and 2 percent for those with total assets above 10 billion rupiah, and will remain flat throughout the program until it ends in March 2017.

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