Indonesia, Southeast Asia’s biggest economy, has recorded one of world’s most successful tax amnesties, with at least 745,000 taxpayers declaring more than $330 billion of assets so far, reports The Cable.
According Reuters, President Joko Widodo cited higher tax revenue as the key to boosting infrastructure spending and growth in the country.
The nine-month tax amnesty, which is billed to expire on March 31, 2017 has beaten government target on the declaration of funds by nearly $30 billion.
The government estimated $303 billion worth of “Indonesian money” secretly stashed abroad in tax havens such as Singapore, Panama, London, Hong Kong and the British Virgin Islands, and introduced the amnesty programme to recover such funds.
Indonesia Investments, a revered new source in the country, said “by offering tax incentives and immunity from prosecution (although a small penalty needs to be paid), the Indonesian government therefore tries to make it attractive for (former) tax evaders to declare their offshore funds to Indonesia’s tax authorities and – if desired – repatriate these funds into Indonesia”.
“The government of Indonesia targets to see the repatriation of IDR 1,000 trillion (approx. USD $76 billion) worth of funds that are currently stashed abroad.
“Tax declarations of on and offshore funds should lead to IDR 165 trillion (approx. USD $12.5 billion) worth of additional state income.”
The results of the repatriation so far, shows that government expected a declaration of $303 billion, but has seen $330 billion declared so far, with 10 days to go.
Experts in Nigeria have asked the President Muhammadu Buhari government to adopt the tax amnesty style used by some economies around the world.
Babatunde Fowler, chairman Federal Inland Revenue Service (FIRS), implemented a partial amnesty programme which raked in N27.086 billion from the waiver of tax penalty and interest programme, and recorded 814,000 fresh tax payers.