Tax pardon for

Tax pardon for
problem taxpayers

From Bisnis Indonesia

The chairman of the Indonesian Economic Recovery Commission
(KPEN) hopes that the next government will promptly apply a tax
pardon to speed up the flow of funds and investment derived from
problem taxpayers after they have taken flight abroad.

The KPEN chief also expected a reduction in fines of 5 percent
to 10 percent instead of as high as 30 percent, as reported in
Bisnis Indonesia on Aug. 16.

If that is simply what the KPEN chairman wanted, the tax
pardon would be unnecessary. The government may, at any time,
apply the relevant provisions of Law No.17/2000, with conditions
to be determined by a government regulation.

Among the requirements are that funds or investments, both
local and overseas, must be directly invested in businesses in
Indonesia, with special rates (instead of fines) to be fixed at
rates lower than general rates.

These new rates have a dominant role because apart from the
consideration of state revenue increase, tax on the funds and
wealth increments might "vanish" after negotiation with dishonest
tax officials if high general rates were applied.

KARNANTO
Jakarta