Indonesian officials left unprepared as tax amnesty programme rolls out

Technical preparation may have been overlooked in Indonesia’s rush to roll out a tax amnesty programme to draw back billions in assets abroad, an expert has warned.

“The mistakes have started from the very beginning at the (tax amnesty) Bill discussion,” Mr Yustinus Prastowo, the executive director of the Center for Indonesia Taxation Analysis, told the Jakarta Globe. “There were no internal promotions that prepare bureaucrats (for the programme).”

This seemed at least partly true when the Jakarta Globe visited some tax offices in East Jakarta last week only to find empty desks, a sleeping officer and unsatisfying responses to technical questions — such as a step-by-step guide to moving overseas savings accounts to approved Indonesian banks.

The attending officers admitted internal information has been limited as the law itself was only signed last week and officers are not prepared yet for detailed queries from taxpayers.

“We need to immediately make a module and prepare a list of frequently asked questions to standardise (procedures),” said Mr Yustinus. “(The module) can prevent mistakes, different interpretations and any kind of unpreparedness.”

The directorate general of taxes at the Finance Ministry has launched a dedicated website with basic information and contact details for the Ministry. Taxpayers, however, are advised to visit tax offices.

While promotion within the Ministry may prove an issue yet, external promotion has been extensive. The launch of the programme on July 1 was followed by heavy promotion throughout the country. Officers have been posted to help desks at embassies in Singapore, Hong Kong and London, where most offshore assets are stored.

The programme grants special personal income tax rates to tax evaders who declare their past earnings between this month and next March. Declared assets, repatriated assets and tax revenue will be updated regularly at the Ministry website.

Last week, Singapore said that reports in Indonesian media claiming that Singapore was implementing policies to thwart the tax amnesty programme were not true. Following the reports, which accused Singaporean banks of luring Indonesian customers with a special scheme to leave their assets in the city state instead of repatriating them, several Indonesian politicians said Indonesia was prepared to take on Singapore in implementing the programme, with Finance Minister Bambang Brodjonegoro saying that he was “not afraid of Singapore which is just a small country like that”.

In response to the “taunts”, Singapore’s Home Affairs and Law Minister said that Singapore may be small, but it is respected and successful, adding that he did not understand why “there is this constant attempt (by Indonesian ministers) to put us (Singapore) down and taunting us that we are small”.

“Every now and then, someone in Indonesia will tell us that we should know our place, a little red dot,” he wrote on Facebook.

“Yes, we are a little red dot. We may be small. But we are respected and successful. And our people lead meaningful lives. And we don’t live in fear of anyone else.” THE JAKARTA GLOBE