- A new tax amnesty is proposed as an alternative to a delayed VAT hike in Indonesia.
- The VAT increase from 11% to 12% was scheduled for January 1 but may be postponed by 2-3 months.
- The tax amnesty aims to compensate for the expected revenue loss from the VAT hike, which was projected to generate 70-80 trillion rupiah (about US$4.4 billion).
- The government needs to increase revenue to support costly programs, such as free meals for school children and achieving food and energy self-sufficiency.
- The tax amnesty would encourage taxpayers to declare previously undeclared assets without fear of legal repercussions.
- The House of Representatives has included the tax amnesty draft in the National Legislation Programme, likely to become law in 2025.
- This would be the third tax amnesty in a decade, following previous ones in 2016 and 2022, which revealed significant hidden assets.
- The Finance Ministry has not publicly commented on the new tax amnesty plan.
- Concerns exist that the new amnesty could lead to further non-compliance among taxpayers.
Source: thestar.com.my
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
