Reuters International

People wait at a help desk for tax amnesty at the country's tax headquarters in Jakarta, Indonesia September 30, 2016. REUTERS/Beawiharta


By Gayatri Suroyo and Hidayat Setiaji

JAKARTA (Reuters) - Hundreds of Indonesians queued for hours on Friday to get the most attractive terms on offer under a tax amnesty that's recovered strongly after a slow start and which the finance minister calls the most successful a country has had.

The amnesty, which runs until March, aims to provide the government with billions of dollars in revenue to help cover a large fiscal deficit.

Facing government threats of an unprecedented crackdown on tax evaders, more than 300,000 Indonesians have joined the tax amnesty scheme and declared $250 billion of assets since its launch in July.

Friday marks the end of the programme's first phase, during which the lowest penalty of 2 percent on previously unreported assets applies. The penalty rates rise 1-2 percentage points on Saturday and rise again from Jan. 1 for the final phase.

"I don't want to miss this. If the value of what I declare is big, than 1 percentage point matters," Lenna Yovanca, an employee in the fashion industry, said while waiting with scores of others outside the main tax office in Jakarta.

Data on Friday showed 319,129 taxpayers had signed up, declaring 3,344 trillion rupiah (198.37 billion pounds) with 133 trillion rupiah pledged to be repatriated back to Indonesia, according to a government website giving daily updates.

Indonesians who declare assets overseas are not required to bring them home, but pay a lower penalty rate if they do. The bulk of Indonesia's offshore assets are believed to be in Singapore, with an estimated $200 billion there in private banking assets.

To date, the amnesty has generated 95.3 trillion rupiah in government revenue, or 57 percent of Jakarta's 165 trillion rupiah target.


"There has been rapid development this month," Finance Minister Sri Mulyani Indrawati told reporters on Thursday.

"Although a lot of people had to wait in line since 3 a.m., the tax directorate general is working its hardest with 90 percent of its staff allocated to serving the tax amnesty," she said.

The former World Bank managing director said a parliament hearing that while many countries have done tax amnesties, Indonesia "is at the highest position" among them with revenue collection equivalent to 0.65 percent of gross domestic product.

India received revenue representing 0.58 percent of GDP, Chile 0.62 percent, Italy 0.2 percent and South Africa 0.17 percent, Indrawati said.

To encourage more amnesty participation, the government is letting participants declare their assets and pay a penalty by Friday, but submit paperwork by Dec. 31.

Some of Indonesia's wealthiest individuals have signed up.

Not everyone has been happy about the amnesty. A lawsuit challenging it as forgiving past crimes of rich taxpayers has been filed in the Constitutional Court, which will rule at a later date.

On Thursday, thousands of workers protested peacefully against amnesty in Jakarta.

(Writing by Randy Fabi; Editing by Richard Borsuk)


 Reuters International