Govt to Initiate the Draft Bill on Tax Amnesty

 
Marcell Sihombing, Rofiq Hidayat
 

Minister of Law and Human Rights Yasonna Laoly. Photo by: RES


The controversial Draft Bill on Tax Amnesty (Draft Bill) seems to make its own path into the Indonesian legal framework. After being introduced by the parliament roughly a month ago, the Draft Bill is now included in the Priority National Legislation Program (Prolegnas). Even though it was proposed by the parliament, the 2016 Prolegnas marked the Draft Bill as a government initiative.
 
“The government agreed to put the Draft Bill as a government initiative,” said the Minister of Law and Human Rights Yasonna H. Laoly when attending a meeting with the Legislation Office (Badan Legislasi) in Jakarta, on Friday, 27 November 2015.
 
Minister Laoly further revealed that the government considered there is urgency, and that the Draft Bill has a strategic value, especially due to current stagnant economic conditions. Having more income from tax will be valuable for financing the national economy.
 
“We all know that the current Indonesia’s tax ratio stands between 11-13%, which is relatively low compared to developed countries’ tax ratio which stands at 24%. Not to mention that tax ratio of developing countries in general stands at 16-18%,” asserted Minister Laoly.
 
According to the Minister, such low tax ratio was caused by many parties reluctant to report their assets outside Indonesian jurisdiction, which is yet to be taxed. Ironically, oversight of the tax sector is far from effective, specifically in the informal sector.
 
Efforts to prevent capital from moving to another country are also far from ideal. The government firmly believed that there are many potential taxes that are yet to be collected, and that the Draft Bill is hoped to increase state income that can be utilized to finance domestic economy and state operations.
 
Commenting on the Draft Bill, lawmaker Hendrawan Supratikno, a member of the Legislation Office, reminded that the Draft Bill must be carefully deliberated. He points out to the sensitive nature of the Draft Bill, due to the fact that the general public discourse on tax amnesty is the same as offering forgiveness to tax offenders.
 
“I like to compare this Draft Bill with the heaven and hell concept. It’s hard to enter heaven but it’s easy to leaving it. The same goes with hell, it’s really easy entering it but incredibly hard to leave it. Therefore, we demand the government to establish an effective administration so that the Draft Bill can be useful in the long-run,” asserted Lawmaker Supratikno.
 
Lawmaker Almuzzamil Yusuf, another member of the Legislation Office, applauded government’s willingness to initiate the Draft Bill, as he believes that tax amnesty is a breakthrough which will increase state income from the taxation sector. Lawmaker Yusuf further stated that government’s initiative is the most ideal measure, because the government is more knowledgeable as regards to development of the state income from tax.
 
“A lot of eyebrows will be raised if the initiative came from the House. The government should have taken the initiative from the start, which could have prevented commotion from the very beginning,” concluded Lawmaker Yusuf.
 
(hot/ds)
 
Marcell Sihombing, Rofiq Hidayat
 

Minister of Law and Human Rights Yasonna Laoly. Photo by: RES


The controversial Draft Bill on Tax Amnesty (Draft Bill) seems to make its own path into the Indonesian legal framework. After being introduced by the parliament roughly a month ago, the Draft Bill is now included in the Priority National Legislation Program (Prolegnas). Even though it was proposed by the parliament, the 2016 Prolegnas marked the Draft Bill as a government initiative.
 
“The government agreed to put the Draft Bill as a government initiative,” said the Minister of Law and Human Rights Yasonna H. Laoly when attending a meeting with the Legislation Office (Badan Legislasi) in Jakarta, on Friday, 27 November 2015.
 
Minister Laoly further revealed that the government considered there is urgency, and that the Draft Bill has a strategic value, especially due to current stagnant economic conditions. Having more income from tax will be valuable for financing the national economy.
 
“We all know that the current Indonesia’s tax ratio stands between 11-13%, which is relatively low compared to developed countries’ tax ratio which stands at 24%. Not to mention that tax ratio of developing countries in general stands at 16-18%,” asserted Minister Laoly.
 
According to the Minister, such low tax ratio was caused by many parties reluctant to report their assets outside Indonesian jurisdiction, which is yet to be taxed. Ironically, oversight of the tax sector is far from effective, specifically in the informal sector.
 
Efforts to prevent capital from moving to another country are also far from ideal. The government firmly believed that there are many potential taxes that are yet to be collected, and that the Draft Bill is hoped to increase state income that can be utilized to finance domestic economy and state operations.
 
Commenting on the Draft Bill, lawmaker Hendrawan Supratikno, a member of the Legislation Office, reminded that the Draft Bill must be carefully deliberated. He points out to the sensitive nature of the Draft Bill, due to the fact that the general public discourse on tax amnesty is the same as offering forgiveness to tax offenders.
 
“I like to compare this Draft Bill with the heaven and hell concept. It’s hard to enter heaven but it’s easy to leaving it. The same goes with hell, it’s really easy entering it but incredibly hard to leave it. Therefore, we demand the government to establish an effective administration so that the Draft Bill can be useful in the long-run,” asserted Lawmaker Supratikno.
 
Lawmaker Almuzzamil Yusuf, another member of the Legislation Office, applauded government’s willingness to initiate the Draft Bill, as he believes that tax amnesty is a breakthrough which will increase state income from the taxation sector. Lawmaker Yusuf further stated that government’s initiative is the most ideal measure, because the government is more knowledgeable as regards to development of the state income from tax.
 
“A lot of eyebrows will be raised if the initiative came from the House. The government should have taken the initiative from the start, which could have prevented commotion from the very beginning,” concluded Lawmaker Yusuf.
 
(hot/ds)
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