Indonesia finmin
vigorously defends tax amnesty in court hearing
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[September 20, 2016]
By Hidayat Setiaji and Gayatri Suroyo
JAKARTA (Reuters) - Indonesia's tax
amnesty is collecting funds to help grow the economy and does not
pardon tax evaders, its finance minister on Tuesday told a court
assessing whether the pivotal government program is constitutional.
The amnesty, launched in July, is a top priority for President Joko
Widodo, who wants the repatriated funds to help cover for
Indonesia's large budget deficit and broaden the tax base.
Should the court strike down a law backing the program that lasts
until March 2017, it would be a serious setback for Widodo.
At a minimum, it will be weeks before the court makes a ruling. The
next hearing is next week.
The amnesty lets taxpayers disclose previously untaxed wealth and
have their tax crime wiped clean in return for paying some
penalties.
Four groups, including one Indonesian trade union, filed judicial
reviews asking the Constitutional Court to declare the law creating
the amnesty null.
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Finance Minister Sri Mulyani Indrawati, a widely-respected
technocrat who returned to Indonesia in July after six years as
World Bank managing director, vigorously defended the amnesty at a
hearing
"The tax amnesty policy was not proposed to pardon tax evaders at
all," she said. "Rather it is a way for taxpayers to withdraw funds
or assets that have been kept abroad all this time and move them
back home to grow the national economy and for taxpayers to be
honest with their wealth and income."
SMALL TAX BASE
Indrawati said the amnesty can improve the tax office's database of
taxpayers, especially the wealthy, which would aid future tax
collection.
Only 27.6 million Indonesians are registered taxpayers out of around
115 million citizens working in the country, she said.
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![](../images/092016pics/busine47.jpg)
Indonesian Finance Minister Sri Mulyani Indrawati gestures during an
interview with Reuters at Finance Ministry office in Jakarta,
Indonesia, August 19, 2016. REUTERS/Beawiharta
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Said Iqbal, the president of the Confederation of Indonesian Workers Union that
is part of one group of plaintiffs, told reporters outside court that he
rejected Indrawati's arguments.
"We workers are compliant taxpayers, while those who've done corruption,
trafficking, drug trading can be pardoned under the tax amnesty law," he said.
The amnesty has taken off after a slow start. More than 1,000 trillion rupiah
($76.05 billion) worth of assets have been declared under the amnesty so far.
The penalty fee collected has amounted to more than 30 trillion rupiah ($2.28
billion), better than the central bank's projection for revenue for the whole
amnesty period.
(Additional reporting by Cindy Silviana; Editing by Richard Borsuk)
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