The Indonesian reformation period promotes continuous new innovations led by its people, thus helping Indonesia’s economic stability. Indonesia is a country that has high economic potential, potential that is starting to be noticed by the international community due to the prosperity of natural resources contained in the motherland. Of course, rapid materialistic success is encouraging news for business actors, but for some people, this is just one edge of a double-edged sword. At the other edge of the blade is an obligation for business actors to pay taxes on their income.
Many citizens are still unfamiliar with the purpose of taxation in a country, especially if it is subject to a large tariff. Taxes are the largest source of income in many countries. They have several functions, including financing all state expenditures such as civil servant salaries, payment of government debt and financing infrastructure development. The government also uses taxes to set state policy, or what is commonly called as a fiscal policy. Some fiscal policies include import duty taxes to suppress imports. The government, through laws and regulations, has provided an opportunity for business actors to report and disclose all their wealth in an accurate and transparent manner in the tax amnesty program, which was first implemented in 2016-2017.
Tax Amnesty, or the Voluntary Disclosure Program (Program Pengungkapan Sukarela or PPS) Volume I, is a significant revolution in taxation because it requires business actors to disclose their wealth transparently, with the purpose of increasing state tax revenue. The reason is that many people are still reluctant to report their assets, causing state tax budget revenues to stagnate.
The government will hold a Tax Amnesty Volume II from January 1 to June 30, 2022. To participate in the tax amnesty, taxpayers who are under examination/investigation, if proven guilty, need to pay an administrative fine that has been determined in advance. The goal is to prevent the tax amnesty from overlapping with the tax law enforcement process.
The implementation of Tax Amnesty Volume II is regulated in Law No. 7 of 2021 concerning Harmonization of Tax Regulations, which is divided into two tax amnesty policy schemes. First, the 2016-2017 tax amnesty alumni program for those who did not have time to disclose their tax obligations at that time. This scheme applies to both individual taxpayers and corporate taxpayers. The rate offered are a final income tax of 11% for property declarations located abroad; 8% for overseas assets repatriated to the country and domestic assets; 11% for foreign assets and domestic assets invested in Government Securities (Surat Berharga Negara/SBN) or business activities in the natural resource processing sector or renewable energy.
Second, the program is aimed at individual taxpayers for assets acquired between 2016-2020 that have not been reported in the 2020 Annual Tax. However, this scheme is not available to corporate taxpayers. In the second scheme, the final income tax rate given is also higher than the first scheme, which is 18% for property declarations located abroad; 14% for overseas assets repatriated to the country and domestic assets; and 11% for foreign assets and domestic assets invested in Government Securities (Surat Berharga Negara/SBN), business activities in the natural resource processing sector or renewable energy.
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Author: Dewi Susanti