JAKARTA: Indonesia (AP) — Indonesia’s Parliament passed a tax amnesty law on Tuesday aimed at drawing billions of dollars from wealthy Indonesians abroad and from tax evaders at home to help finance infrastructure and boost economic growth.
The law, which takes effect next month, grants special tax rates of 2 percent to 10 percent to tax evaders who declare their past earnings, compared to normal personal income tax rates of 5 to 30 percent.
Enterprises with up to 10 billion rupiah ($757,700) in assets will enjoy a 0.5 percent rate, while those with greater assets will be levied a 2 percent rate. Normal business tax rates are as high as 25 percent.
People and companies that declare their earnings and pay the special taxes will not be penalized for having failed to declare them before.
Those with wealth abroad who repatriate it from July to September will enjoy a 2 percent tax rate, those who return it by December will receive a 3 percent rate, and those who return it by March 31, 2017, a 5 percent rate.
Those declaring assets abroad without repatriating them to Indonesia will be levied 4 percent, 6 percent and 10 percent tax rates for the same periods. Indonesia, a country of more than 250 million people, has only about 30 million registered taxpayers.
Bank Indonesia, the country’s central bank, has estimated that Indonesians have about $43 billion in undeclared assets overseas.
Minister of Finance Bambang Brodjonegoro said the tax amnesty is expected to draw about 165 trillion rupiah ($12.5 billion) for the government.
