Economist endorses tax amnesty plan

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)