Prima Wirayani, Jakarta – The first stage of the tax amnesty program may have ended in success, but the government's bigger purpose of widening the country's tax base still seems far from reach.
During the first three months of the program's implementation that ended on Sept. 30, the program managed to persuade taxpayers to declare Rp 3.6 quadrillion (US$277.18 billion) in assets, around 90 percent of the targeted Rp 4 quadrillion.
At the same time, the penalty or redemption payment stood at Rp 89.1 trillion, 54 percent of the targeted Rp 165 trillion.
However, those funds were declared by fewer than 400,000 taxpayers, a tiny fraction of the country's 30 million taxpayers, according to data from the Finance Ministry's Directorate General of Taxation.
A majority of the participants during the first phase were those who already had a taxpayer number and had submitted their tax return forms (SPT), meaning that the tax amnesty program was only successful in attracting a small number of new taxpayers, recorded at 15,856.
"That [the new taxpayer number] is very small, considering the number of new potential taxpayers could reach around 20 to 25 million," said Center for Indonesia Taxation Analysis (CITA) executive director Yustinus Prastowo on Tuesday.
CITA estimates there are 50 million to 55 million people currently eligible as taxpayers, those with an annual income above Rp 54 million per person, but only 30 million of them already have tax numbers.
As a comparison, a previous program dubbed "the sunset policy" garnered more than 3.5 million new taxpayers during a 12-month period in 2008.
Back then, the government allowed corporate and individual taxpayers to pay back taxes without penalties or interest for up to one year from the start of the amnesty date.
When the sunset policy was extended for two months in 2009, the government attracted an additional 2.1 million new taxpayers.
Danny Darussalam Tax Center partner Bawono Kristiaji expressed a similar view as Yustinus, saying that although the achievement was positive, it was not yet optimal.
"At least we are seeing signs that the government is working to distribute the tax burden more fairly to reduce free riders in our tax system," he wrote in a text message, expressing hope that the tax structure would no longer rely solely on corporate income taxes and value-added taxes, but also on individual income taxes.
Tax collection is important for the country, as more than 85 percent of state revenue is sourced from taxes. However, the largest Southeast Asian economy is struggling to increase its tax ratio, which currently stands at around 11 percent of its gross domestic product (GDP), as opposed to the ratios in neighboring countries that hover at 14 to 15 percent.
OCBC economist Wellian Wiranto wrote in a research note that the real game-changing element of this program would be over the longer term. He insisted there had to be a belief that this program presented a last chance to come clean, that it was now or never.
"After all, if Indonesians assume the government might roll out another plan down the road, they might think it is better to wait and see if the whole AEOI [automatic exchange of information] initiative that may leave them vulnerably exposed is for real, or just a paper tiger with no real bite."
Separately, taxation director general Ken Dwijugiasteadi expressed optimism that more new taxpayers would register during the amnesty's second phases in October to December, and third phase in January to March, supported by its information dissemination efforts.
The tax office will focus not only on small and medium enterprises (SMEs) but also existing taxpayers and tycoons.