Jostling for A share of The Tax Amnesty Fund

by PJWisaksono

It has been one week since the tax amnesty law became effective. The legislation, which creates a mechanism to bring tax evaders back into compliance with the law, will require individuals and companies to repay taxes and pay fines. Incoming funds will be channeled through a number of banks and the money will be managed by investment managers and security firms. The finance ministry has assigned 19 banks, 18 investment managers and 19 securities firms to the task.

Tax Amnesty Participants:

  • Personal taxpayers;
  • Micro, small and medium enterprise (SMEs) taxpayers;
  • Corporate taxpayers;
  • An individual or entity that has not become a taxpayer.

Requairements:

  • Pay redemption money;
  • Bring back assets parked abroad;
  • Disclose hidden wealth.

Those Who May Not Participate:

  • Under investigation with case file declared complete by the Attorney-General’s Office;
  • Under trial;
  • Serving criminal sentence.

Redemption Rates:

  • Domestic declaration: 2 percent (3rd quarte: July 1 – September 30, 2016); 3 percent (4th quarter: October 1 – December 31, 2016); and 5 percent (1st quarter: January 1 – March 31, 2017);
  • Overseas declaration: 4 percent (3rd quarte: July 1 – September 30, 2016); 6 percent (4th quarter: October 1 – December 31, 2016); and 10 percent (1st quarter: January 1 – March 31, 2017);
  • SMEs with declared assets under Rp 10 billion: 0.4 percent (July 1, 2016 – March 31, 2017);
  • SMEs with declared assets over Rp 10 billion: 0.4 percent (July 1, 2016 – March 31, 2017).

Redemption Money Formula:

  • Redemption = Rate x Net Asset Value as of December 31, 2015, minus Net Assets in the 2015 filing of tax return (SPT).

Citizen Assets Abroad:

  • In tax heaven countries: Rp 1 quadrillion;
  • Total flow of illegal funds (2004 – 2013): Rp 2.5 quadrillion.

Potential Funds:

  • Repatriation fund of Rp 1 quadrillion;
  • Tax revenues of Rp 165 trillion in 2016 from redemption money.

Institutions for Repatriated Funds:

  • Banks: BCA, BRI, Bank Mandiri, BNI, Bank Danamon, Bank Permata, Panin Indonesia, Maybank Indonesia (Malaysia), CIMB Niaga (Malaysia), UOB Indonesia (Singapore), Citibank (USA), HSBC (Hong Kong) ~ has not signed a contract, DBS (Singapore), Standard Chartered (English), Deutsche Bank AG (Germany), Bank Mega, BPD Jabar and Banten, Bank Bukopin, Bank Syariah Mandiri;
  • Investment Managers: Schroder Investment Management Indonesia, Eastspring Investment, Manulife Asset Management, Bahana TCW, Mandiri Manajemen Investasi, BNP Paribas Investment, Batavia Prosperindo Aset Manajemen, Danareksa Investment, BNI Asset Management, Panin Asset Management, Ashmore Asset Management, Sinarmas Asset Management, Trimegah Asset, Syailendra Capital, PNM Investment Management, Ciptadana Asset Management, Bowsprit Asset Management, Indosurya Asset Management;
  • Securities Firms: Sinarmas, Panin, CLSA Indonesia, Mandiri Sekuritas, CIMB Securities, Trimegah, RHB, Daewoo, Bahana, Indopremier, UOB Kay Hian, BNI, Sucorinvest Central Gani, Danpac, Panca Global, MNC Securities, Pacific Capital, Mega Capital, Pratama Capital.

Miscellaneous Investment Instruments:

Assets repatriated from abroad must be invested three years after returning home. These include:

  • Government bonds;
  • State-owned enterprises bonds;
  • Government-owned financial institutions bonds;
  • Financial investment at designated lenders;
  • Bonds issued by private companies whose trade is supervised by the Financial Services Authority (OJK);
  • Infrastructure investment through government and private company cooperations;
  • Investments in real sectors based on government priorities;
  • Other legitimate investments.

Source of the whole article (except the picture): Tempo (English) Magazine | July 25-31, 2016 edition | Page 27