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Govt prepares second tax amnesty in upcoming tax law

Tempo - October 1, 2021

Caesar Akbar, Vindry Florentin, Jakarta – The Taxation Harmonization Bill (RUU HPP) will be ratified at the House of Representative (DPR) plenary scheduled to be held next week. However, is it true that it includes a clause mentioning tax amnesty?

Regulation wise, the amnesty means the government will be giving taxpayers a chance to declare assets that may not have been declared before. This concept is similar to the tax amnesty back in 2016 which the assets not declared in official statements from January 1, 1985, to December 31, 2015, will be considered as additional income and subjected to income tax with varying levels of tariff depending on the existence and type of investment property.

Despite being similar, head of the bill committee Dolfie O.F.P on Thursday said that the new one is not a tax amnesty as it "emphasizes attempts to improve voluntary conformity to report tax liabilities that were not declared."

According to the draft of Tax Regulations Harmonization Bill, obtained by Tempo, the section filed in Chapter V of Article 6 states that it will be introduced on January 1, 2022, until June 30, 2022.

Among many, notable details similar to the 2016 tax amnesty under Article 5 (7) are:

Eight percent tariff on net assets located outside the territory of Indonesia provided that they are transferred to Indonesia and not invested in a number of objects.The objects include business activities in the natural resource processing sector or the renewable energy sector within the territory of Indonesia and/or state securities.

Six percent tariff on net assets located within the Indonesian territory, provided that it is invested in business activities in the natural resource processing sector or in the renewable energy sector in the territory of Indonesia; and/or state securities.

11 percent tariff imposed on net assets that are outside the territory of Indonesia and are not transferred back to Indonesia.

Source: https://en.tempo.co/read/1512580/govt-prepares-second-tax-amnesty-in-upcoming-tax-la