President Joko Widodo is aware of people's concern about the tax amnesty scheme and will ask Finance Minister Sri Mulyani and the Director General of Tax to address the issue.
Cabinet Secretary Pramono Agung admitted there are a lot of questions from the public about tax amnesty. These questions must be answered by the Tax Directorate General to avoid public unrest (Read: Asset Report Mandated; Public Concern over Tax Amnesty Growing)
The government is concerned that if people grow restless, the tax amnesty scheme will not run as smoothly as planned. This especially important because President Widodo directly promoted the program to taxpayers in several provinces.
Pramono reiterated that the core of tax amnesty is repatriation and asset declaration: how to bring home Indonesian’s assets invested abroad. It also aims to make people more disciplined about paying their taxes.
"It's not to hunt down diligent taxpayers or people with small tax liabilities who forgot to pay up, who decide to declare their assets while there is a tax amnesty program," Pramono said on his official website Monday (29/8).
Pramono claimed he was aware of all issues related to the tax amnesty scheme. The government has also asked the Tax Director General to take preventive action and stop rumours from spreading.
He also denied claims that the tax amnesty is targeting the wrong people. "It's not off target, but there are people turning this scheme into a political agenda," he said.
The Tax Amnesty Law applies to all taxpayers. But Pramono said the law's preliminary argument and academic text explicitly states that the rules are aimed at taxpayers who have not reported their wealth, especially those with large investments overseas.
He said the government is ready to counter any civil action over the implementation of the tax amnesty. The president has asked echelon 1 staff and ministers to attend the judicial review at the Constitutional Court.
Pramono added that the government had prepared the next steps to improve Indonesia's tax laws. This includes efforts to prevent double taxation, on corporate dividend income, for example.
Once these steps are taken, he believes that Indonesia's tax base will expand and the state's tax revenue will increase; making the national economy more robust.
"Again, the main spirit of the tax amnesty program is how to bring home those huge funds placed overseas, whether through repatriation or declaration," he said.