Economist endorses tax amnesty plan

The Jakarta Post, Jakarta

In addition to the government's planned tax amnesty, an economist suggested businesspeople set up a "taxpayers' club" to help the government curb irregularities in the tax office.

Economist Faisal Basri said on Thursday he supported the government's plan to introduce an amnesty for tax evaders.

"I have no problem if the tax amnesty is applied. However, the government must determine a fair rate of compensation. It should not be too high or too low," he said.

By introducing a tax amnesty, the government hopes to collect Rp 50 trillion (US$5.3 billion) in fines imposed on tax evaders in return for their immunity from prosecution.

The planned tax amnesty is part of the government's efforts to expand the tax base by encouraging parties that have not paid taxes for years to begin paying their taxes.

Some observers, however, have raised concern that the amnesty could violate the public's sense of justice.

Faisal said implementing a tax amnesty would mean reforming the tax system. He did not elaborate, only saying a tax amnesty would significantly increase tax revenue and reduce the number of tax evaders.

Discussing his idea for setting up a "taxpayers' club", Faisal said the informal body could help overcome irregularities in the tax office.

"By forming a taxpayers' club, the business community could help each other deal with tax officials rather than doing it alone," he said, adding that businesspeople would also benefit by sharing information.

Surveys have found that the tax office is one of the most corrupt state institutions in the country.

Legislator Asman Abnur, however, doubted the effectiveness of an informal body like a taxpayers' club.

"If a businessman safely evaded his taxes, why should he open up his tax reports and share them with others?" he asked. (004)