Jokowi amnesty favours tax cheats and punishes payers, OECD says

(Aug 19): Indonesia’s tax amnesty is too generous and may even hamper compliance in an economy already ranked as one of Southeast Asia’s worst for collection, said the Organisation for Economic Cooperation and Development.

As President Joko Widodo’s government starts counting receipts in a program that aims to raise 165 trillion rupiah ($17 billion) in revenue, the OECD has criticised the rates on offer. Under the amnesty, tax-avoiding individuals and companies would pay between just 2% and 10% in penalties, or around a third of what they should be.

“This treatment is likely to be substantially more favourable than the tax treatment awarded to fully-compliant taxpayers that have declared the assets from the outset,” said Philip Kerfs, head of international cooperation in the OECD’s Centre for Tax Policy and Administration, in an e-mailed response to questions.

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