Indonesia Plans to Run Third Tax Amnesty Program

TEMPO.CO, Jakarta – The government intends to re-enforce the tax amnesty program in a move to boost state revenue to accommodate Prabowo Subianto’s vision and goals, confirmed Fauzi Amro, chief head of Commission XI of the House of Representatives (DPR).

During Tuesday’s plenary session on November 19, 2024, DPR designated 41 draft bills in the National Legislation Program priority list, one of which was the draft revision of Law No. 11 of 2016 on tax amnesty. Fauzi said the DPR will discuss the proposal with the government. 

“Substantially, the country requires a cashflow income to realize President Prabowo’s aspirations,” he said at the DPR building on Wednesday, November 20, 2024.

Tax amnesty is tax forgiveness the government offers to individual and corporate taxpayers in exchange for disclosing previously undisclosed assets or obligations that have not been fulfilled. 

The Indonesian government first implemented the program in 2016. In 2022, the government reintroduced tax amnesty through the Voluntary Disclosure Program (PPS), or Tax Amnesty Volume II.

According to Fauzi, all factions in Commission XI agreed to include the tax amnesty as a priority bill next year. The Nasdem Party politician claimed the previous tax amnesty programs were successful, thereby a third volume of tax amnesty was considered. “Tax amnesties I and II successfully attracted taxpayers from abroad, increasing tax awareness,” he said.

Tax amnesty is considered one of the solutions to reduce the budget deficit in 2026, enabling those previously failing to pay taxes to comply and cut the 2025 Rp616.2 trillion deficit by 2026.

Ajib Hamdani, an Economic Policy Analyst at the Indonesian Employers Association (Apindo), stated that the tax amnesty policy will always generate pros and cons. On one hand, he believes that the public’s tax literacy is still less than satisfactory, necessitating the tax amnesty program.

However, on the other hand, tax amnesty will create a sense of injustice towards compliant taxpayers. “Because those joining the tax amnesty program admit that they were not compliant in fulfilling their tax obligations before,” he stated.

The public also could underestimate general tax policies because the government routinely introduces tax amnesty programs. Nevertheless, if successfully implemented, Ajib believes the program can increase state revenue.

Vedro Imanuel G. contributed to the writing of this article.

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