ADB: Tax amnesty program more useful in strengthening tax data base

"Program is indeed potential to increase the state revenues, but it is more useful to strengthen tax data base," ADB chief representative in Indonesia Steven Tabor said.
Jakarta (ANTARA News) - Bank Pembangunan Asia (ADB) said the countrys tax amnesty program, while helping achieve the state revenue target, is more useful in long term to strengthen the countrys tax data base.

"Program is indeed potential to increase the state revenues, but it is more useful to strengthen tax data base," ADB chief representative in Indonesia Steven Tabor said here on Tuesday.

Tabor said the redemption fund from the tax amnesty program had an added value to increase the state revenues, but the impact is not very significant until the end of the first period on September 30, 2016.

"From the report of realization about the redemption fund, we could see an increase in revenue. This is higher than pessimistic prediction, though not very big compared with optimistic prediction," he said.

He said , the impact of the program on tax revenues and on the improving tax data base could be fully seen in 2017.

"The impact on tax reform, including new tax payers and increasing potential of revenues for social spending, education, and infrastructure could be seen only next year," he said.

Tabor said tax officers should not focus only on the program, as there is a lot of potential of tax expansion that could be done this year such as from corporate tax.

"If you focus only on tax amnesty without seeking to dig up potentials of other taxes , tax revenues could fall short of expectation," he said.

He said the lower than expected repatriation of Indonesian assets from abroad until Sept 30 expected to reach only Rp107 trillion , could also serve as a warning, although declaration of assets in the country already reached Rp1,428 trillion.

"The low fund repatriation could not fully contribute to the investment sector. Whereas investment is needed as an economic growth driver," he said.

Altogether, Tabor hoped that the countrys policy makers would consider steps to face risk in growth prospect if revenue falls short of expectation that may necessitate further budget slashing.

"If revenues from the tax amnesty program is not up to expectation , slashing of spending budget could be needed. However, the budget for infrastructure should be be cut as it would damage the confidence of the business sector," he said.(*)

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