While some Indonesians still stash their money under their pillows, others deposit their cash in banks in Switzerland, Hong Kong, the Philippines and Singapore.
Jokowi
President Joko Widodo Cahyo | Biro Pers Sekretariat Kepresidenan

President Joko Widodo has said that all countries are competing for cash inflows from Indonesians assets held in countries overseas.

He said that while some Indonesians still stash their money under their pillows, others deposit their cash in banks in Switzerland, Hong Kong, the Philippines and Singapore.

“I have the data,” Jokowi said at a tax amnesty information event in Medan, Thursday (21/6), as quoted from the Cabinet Secretary website. Although it is common practice in business for Indonesians to invest their money abroad, the President believes it is not right.

Because the state needs the participation of all, including people who hold their money overseas, the government has developed a legal umbrella, in the form of the Tax Amnesty Law.

The President urged entrepreneurs to take advantage of this law. “When this chance has gone, there is no telling when you will be able to withdraw this money again,” Widodo said. (Read: NGO Sues Tax Amnesty Law as It is Potential for Money Laundering)

The President explained that tax amnesty means writing off tax payable and freeing taxpayers from any administrative and criminal sanctions and penalties. The government will stop tax crime investigations and inquiries.

To take part in the tax amnesty, taxpayers only need to declare the real value of their assets, including cash and property. After declaring their assets, taxpayers must pay a redemption fee, which the President believes is very low.

He said that the government has applied low redemption fees to attract cash inflows from abroad. If the money cannot be used for direct investment, they can be invested in ordinary government bonds or sukuk.

Eighteen banks are ready to place these funds in time deposits, savings accounts, and current accounts. However, the President has reminded taxpayers that only those who are not implicated in ongoing tax cases and do not have unspent convictions for tax crimes are eligible to participate in the tax amnesty. (Read: These are the Tax Amnesty Rules)