Hot Subject 2016 Sept - Tax Amnesty

[fastpitch17]

I think many are still relating this to the Sunshine Period when people thought they were safe and ended up being targets of deep investigations. Plus, I think a lot of the cash is associated with high level former and current government officials and if their names were leaked there may be negative repercussions.

 

[Imagem]

Thanks for your post and link Dafluff. That seems to be the same that my friend was saying and I have copy & pasted your post over to her. She did not come away from the meeting with much more info than I posted as it was held in Indonesian with only a little translated to English. However she is having lunch with someone who also attended and will explain more to her.

 

[mauricio]

A seminar with the theme “Jebakan-jebakan Tax Amnesty” (Tax Amnesty Traps) was supposed to be held at Hotel Santika Depok on 6[SUP]th[/SUP] August 2016, but due to protest from the tax office, had to change the theme to “Optimalisasi Tax Amnesty” (Optimizing Tax Amnesty).

I read somewhere that the first persons to ask for tax amnesty should actually be the tax officers themselves. Ask any big or medium businesses, are the tax officers clean & honest now? The Finance Minister is an idealist, maybe she failed to realize that tax officers today are polite, smarter, more sophisticated & better educated but not any cleaner or more honest than when she last held the position under SBY. If corruption remains high, how can people trust the tax amnesty? It’s like washing dishes with dirty water.

 

[mauricio]

BTW, to those who have trust in the tax amnesty, make sure you declare everything truthfully. Because if they suspected that you are not completely honest, they can open your case and investigate your taxes from fiscal year 1985 to 2015 (over a 30 year time period).

 

[jstar]

A seminar with the theme “Jebakan-jebakan Tax Amnesty†(Tax Amnesty Traps) was supposed to be held at Hotel Santika Depok on 6[SUP]th[/SUP] August 2016, but due to protest from the tax office, had to change the theme to “Optimalisasi Tax Amnesty†(Optimizing Tax Amnesty).

The one in Kemayoran Expo attracted quite some interested visitors.

According to Sri the money will come pouring in, in September. We'll see.

 

[waarmstrong]

Interesting. So Siri can now predict the future! What will Apple come up with next?

 

[jstar]

It's like talking to my dad: Siri! Geen Siri pa! Sri de minister!!

 

[waarmstrong]

It's like talking to my dad: Siri! Geen Siri pa! Sri de minister!!

Good that you talk to your dad, wish I could.

 

[mauricio]

According to Sri the money will come pouring in, in September. We'll see.

What happens if it didn't?
But if it does...
Rupiah will strengthen, interest rate will drop, exporters may go bankrupt

 

[Davita]

If the USA Federal Reserve increase interest rates soon, as is predicted.....then any increase in the IDR due to remittances to RI will be countered by an increase in the US$. Maybe a win-win for Indonesia. More money to circulate internally and maybe not disturbing the exchange rate too much.

 

[dafluff]

After careful evaluation of what the actual tax amnesty regulations are, and the impact it is already having (or not having), I am very skeptical that they will get anywhere near the target of asset repatriation. Unfortunately this was supposed to be the biggest benefit of the amnesty, as the government envisioned a flood of hard currency returning to Indonesia, which they can purchase and borrow in Rupiah. However, the reality is that the difference between repatriation and simply declaring the money in foreign accounts is a measly 2%, and many foreign banks (chiefly in Singapore) have stated that they will cover this amount. Very few people will be interested in exchanging hard currency already abroad in safe vehicles for Indonesian paper over at most 2%.

The second reason is that none of the big fish are biting. So far participants have been middle class tax payers who are scared. The government says that the big players are probably still getting the paper work ready. Just as likely they know they are untouchable. The people at the highest levels are not afraid of some silly bureaucrats, even one who was an ex-World Bank director.

The statistics bears this out, of the Rp 95 trillion so far declared, only Rp 15 trillion is from abroad, of that a measly Rp 7 trillion was repatriated. This represents about 15,000 declarations, so the average is around Rp 6 billion, which is hardly the big fish this legislation was to target.

The way the regulation is written also presents a lot of problems. Many people who participate may not even have an actual tax burden, but participate anyway out of fear. For instance someone whose undeclared asset is an inherited house. That was never subject to taxation, so was never reported (this part is wrong, but at best a clerical error). However, now they are scared, and they may have no way of proving the inheritance that happened many years ago. So rather than dealing with the tax people they report it and pay the 2% penalty.

In the long run this may even have a chilling effect on the economy. The finance minister commented about this recently.

 

[jstar]

It does have some more positive effects in the European countries, their amnesty programs, but that is only because the pressure on the Luxemburg and Swiss government and banks is enormous. The Swiss banks contact their EU customers with many requests and even cut off many customers from other countries.

Of course it's all the money in Singapore they are aiming at but the only way is to have the national banks negotiate on this.

 

[kimdub]

It does have some more positive effects in the European countries, their amnesty programs, but that is only because the pressure on the Luxemburg and Swiss government and banks is enormous. The Swiss banks contact their EU customers with many requests and even cut off many customers from other countries.

Of course it's all the money in Singapore they are aiming at but the only way is to have the national banks negotiate on this.

Agree. I always enjoy Singapore, but that little place is all about the money. I just don't think Indonesia has any real clout with Singapore to get any significant cooperation.

Possibly the threat of a toxic cloud from forest burning year round would get a blink out of them. Or the threat of smuggling in the entire membership of FPI.

 

[El_Goretto]

Or the threat of smuggling in the entire membership of FPI.

They'd actually get arrested there. A couple of cane lashes would quickly calm down any hot temper too.

 

[jstar]

I read somewhere they expect no more than $30 billion will go back to RI. And that was a very optimistic guesstimate.

And how much in total is parked in Singapore by Indonesians? They say two hundred billion, $200.000.000.000. Gloop.

 

[jstar]

Today in the Lippo Mall in Puri:

 

[Davita]

Sri Mulyani predicted there would be a flood of businessmen taking advantage of the scheme before the September deadline for this round.
This from front page Jakarta Post Saturday....

“I am not only declaring my unreported assets, but also repatriating a big chunk of them to be invested here. I hope my example will encourage others to follow suit,†said Sofjan, whose empire, the Santini Group, deals in automotive parts, infrastructure, natural resources, property development and services.
When asked where he would invest his repatriated assets, Sofjan replied he would use them to buy companies and build a number of hotels in Indonesia.
Although Sofjan believed Indonesia was in dire need of the repatriated assets, he felt only as much as 35 percent of overseas assets would be repatriated and around Rp 1 quadrillion of unreported assets declared.
“That’s probably the most logical figure. The Rp 4 quadrillion target is not only too high but also lacks rationality,†said Sofjan, Vice President Jusuf Kalla’s chief economic advisor and the prime initiator of the amnesty policy.
Later in the day, property magnate James Riady of the Lippo Group also received a red-carpet welcome at the Kebayoran Baru tax office as he submitted an amnesty application.
Sofjan and James are the first wave of high-profile tycoons to participate publicly in the program. Other business magnates such as Tahir of the Mayapada Group and the Bakrie family are also said to be keen to partake.
Business players say they are committed to declaring up to Rp 1 quadrillion (US$75.41 billion) worth of assets during the program.

 

[fastpitch17]

I received this from a friend. He didn't source it so I can't link to it. Any thoughts on this statement. It doesn't ring being correct to me but that could just be because this tax stuff here is so complicated for an Expat.

Found this on the web yesterday:

My Indonesia wife and I (expat – retired) visited the Indonesia tax office this morning. And ended up talking with 2 supervisors because they could speak English. Summation:
Prenuptial ( what's is in her name is hers and what's is my name is mine during the the marriage ) 1. Any assets (money, car, etc) given “gift” by me to my wife is treated as INCOME for my wife. And she has to report it as taxable income (5-30% scale). In our case I gave paid for the house, car and my old vespa (in her name). She has 2 choices, tax amnesty - 2% or amend her year end tax statement in which the above items were purchased and report the amount as taxable income ( 5-30% scale). No brainier here, we choose amnesty.

No Prenuptial 1. No gift tax ! So you can give “gift” your wife money (for a house, car, etc) with out any tax liabilities to either party. Proof is required to show that the asset belonged to you and was transferred to your wife. In other words, you transfer money from your bank account to her bank account. The proof is your bank books. ----------- I was told per regulation 243/PMIC .03/2014 that since I have no Indonesian income (other than bank interest) that I do not have to file any year end tax statement. And any saving , investments, income, etc outside of Indonesia that I have, they do not care about and no reporting is required. And I can transfer money into Indonesia without any tax questions.

 

[mauricio]

I received this from a friend. He didn't source it so I can't link to it. Any thoughts on this statement. It doesn't ring being correct to me but that could just be because this tax stuff here is so complicated for an Expat.

As far as I know, the tax amnesty is not for expats. If your Indonesian wife has no NPWP, it's not for her too.

 

[fastpitch17]

As far as I know, the tax amnesty is not for expats. If your Indonesian wife has no NPWP, it's not for her too.

Not concerned for being an Expat, wife, or amnesty. What I am wondering is if the part about Prenup vs no prenup is factual or the information given in regards to a foreign pension.