pro-visioner.com – Revealing Voluntary Disclosures , There are three questions-or concerns-big about the Voluntary Disclosure Program.
Many people think that when the Voluntary Disclosure Program was decided in the latest Tax Law, namely the Tax Regulation Harmonization Law, it was to continue the 2016 Tax Amnesty program at that time. The author concludes that there are at least three big questions arising from the public and taxpayers in this country.
The first question: Tax Amnesty Volume I lacked interest?
The emergence of this question is something natural considering that one thing that has been noted with quite a lot of digital footprints in online mass media is that this policy contradicts the government’s commitment during Tax Amnesty Volume I in 2016-2017. At that time, almost all officials, ranging from the President, Minister of Finance, to the Director General of Taxes, compactly stated that tax amnesty was a once-in-a-lifetime policy.
The jargon used was quite phenomenal, “reveal, redeem, relieve”. What does it mean? The tax evader’s apology door is only opened once. There is no subsequent amnesty. Tax sinners will be hunted down. Law enforcement is the commander. If they do not participate in the Tax Amnesty, tax evaders must accept the consequences of being audited and having to pay 200 percent sanctions, as stated in Article 18 of the Tax Amnesty Law.
When we talk about an inconsistent policy from the government, of course we cannot only blame the government, because there are other parties involved in the ratification of this policy, namely the House of Representatives, which is the representation of the people of this country. So, the government does have the right to propose a bill, but the DPR still has the right to reject it if the bill is deemed inconsistent with the conscience of the Indonesian people. In fact, this program was passed by the majority of DPR members during the Plenary Session at the end of October 2021. The regulatory products issued by our country cannot be separated from the political and state system in our own country. Therefore, don’t be surprised later when a policy appears that annuls the previous policy.
The author cites data on taxpayer participation in TA volume I on the CNN Indonesia website. Data from the Directorate General of Taxes shows that the total number of taxpayers participating is 956,793. The value of assets disclosed amounted to IDR 4,854.63 trillion.
However, the tax repatriation commitment is only IDR 147 trillion. This amount is equivalent to 14.7 percent of the target set at IDR 1,000 trillion.
Meanwhile, the value of domestic declaration assets amounted to IDR 3,676 trillion. Then, the value of overseas declaration assets amounted to IDR 1,031 trillion.
Furthermore, the state only received a ransom of IDR 114.02 trillion, or equivalent to 69 percent of the target of IDR 165 trillion. The largest redemption money came from non-MSME Individual Taxpayers which reached IDR 91.1 trillion. Meanwhile, the redemption money from non-MFI Corporate Taxpayers amounted to IDR 14.6 trillion.
Then, the ransom from MSME individuals amounted to IDR 7.73 trillion. Meanwhile, the redemption money from MSME entities amounted to IDR 656 billion.
The data above shows the lack of interest of taxpayers in participating in this program. Learning from Tax Amnesty Volume I, the author reads that the Voluntary Disclosure Program is a way to repackage Tax Amnesty Volume I into a much more attractive program. What are the new packaging in this Voluntary Disclosure Program?
The most interesting one is the Simplification of Asset Disclosure Reporting. In the previous program, taxpayers had to come to the Tax Office or a special service area to report their data manually. Now, they can simply access the service on the old https://djponline to participate in this program. It is so easy, even if there are shortcomings or reporting errors, taxpayers can correct all their reports on the page before the due date at the end of June 2022. The era of digitalization is truly utilized by the tax authority to improve the quality of its services to taxpayers. As a result, it is expected that the number of prospective participants of the Voluntary Disclosure Program will increase significantly.
Another way of repackaging is a proper understanding approach to the public that this program has benefits that are much cheaper in the future compared to the general progressive income tax rate. The participants can simulate independently if there are assets that have not been reported and included in this program compared to if the assets are not reported and found by the tax authorities at a later date, with multiple administrative sanctions.
The question arises again: Wasn’t this method also done in the first volume of the TA? The answer is that the government this time is more confident in the quality of data and information they have on assets scattered in the country owned by taxpayers or those who have not yet become taxpayers. Large amounts of data from various domestic and foreign data sources are compiled in big data. Second question: The Voluntary Disclosure Program is a “Batman trap”?
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Why does this question arise? It is natural for people to be worried about something bad happening to them in the future because it is just an entry point for taxation officials to finish them off. As the next question is whether later the participants of this program will be re-examined by the tax authorities? This means that they need a guarantee to ensure that nothing negative happens in the future related to when they join this program by revealing assets that have never been reported before in the Annual Tax Return. The guarantee turns out to be in the Harmonization of Tax Regulations Law which states that taxpayers participating in Tax Amnesty Volume I are not subject to income tax in accordance with applicable regulations and administrative sanctions of 200 percent increase according to Article 18 Paragraph 3 of the Tax Amnesty Law. And for taxpayers non-participants in Tax Amnesty Volume I) no tax audit will be carried out from 2016 to 2020 for individual income tax, income tax and VAT obligations, no criminal investigation, investigation and/or prosecution will be carried out.
What guarantees is the law. This means that tax officials are strictly prohibited from doing the above forbidden things unless other data or information regarding assets that have not been disclosed in the Asset Disclosure Notification Letter is found.
Suppose the above concern is answered, but what about the next concern whether the data and information on assets disclosed by the Taxpayers will trigger new problems in the future? Again, the Income Tax Law affirms that the Protection of Data/Information sourced from Asset Disclosure Notification Letter (SPPH) and its attachments administered by the Ministry of Finance or other parties related to the implementation of the Income Tax Law cannot be used as the basis for investigation, investigation, and/or criminal prosecution against Taxpayers.
And the last concern is whether there will be more similar programs in the coming years that cause the Taxpayers’ view to be skeptical on this program? If there are more, then they will say, “Ah, later, there will be another program in the future anyway.” About this, the author cannot give a definite answer, because once again, the policy on a rule/regulation is a product of the political system in our country. Remember, in politics there are no absolutes; there are only interests.
Third question: Does this program come with any political concessions?
This is the most complicated question to answer, as the only ones who can answer it are those who drafted the program and who endorsed its main motive. However, the author tries to convey only the data calculation that emerged when the results of Tax Amnesty Volume I were completed with some of the President’s statements regarding the amount of wealth or assets owned by Indonesians at home and abroad.
It is undeniable that the Voluntary Disclosure Program policy will provide an oasis for the government that is thirsty, because tax revenue is dragging, even contracting due to the pandemic.
If it runs effectively, the potential of this program for state revenue will help the state budget. Based on business calculations, assuming a rate in the range of 6 percent to 11 percent, the potential revenue reaches IDR 27.06 trillion to IDR 49.61 trillion.
The estimate refers to the difference in the amount of assets that have not been reported in the 2019 Annual Income Tax Return (SPT) with the amount of assets from the Automatic Exchange of Information (AEOI), multiplied by the applicable rate.
Referring to the government’s calculation, the difference between the amount of assets that have not been reported in the 2019 Annual Income Tax Return and the amount of assets based on AEOI data is IDR 451 trillion.
Meanwhile, the potential tax revenue from the 2016 Tax Amnesty participants who have not disclosed assets as of December 31, 2015 reaches IDR 597.84 trillion to IDR 1,096.04 trillion.
The potential figure uses the assumption of a rate of 6 percent to 11 percent multiplied by the difference in assets worth IDR 9,964 trillion that have not been disclosed after the 2016 Tax Amnesty ends.
The IDR 9,964 trillion asset difference refers to President Joko Widodo’s statement that there are IDR 11,000 trillion of Indonesian citizens’ funds stored abroad, minus the IDR 1,036 trillion of offshore asset declarations contained in the Academic Paper of the General Provisions and Procedures for Taxation (KUP) Bill, the initial version of the HPP Law.
The business community allegedly supports this policy. When associated with the program rates that apply from January 1, 2022 to June 30, 2022 in the range of 6 percent to 11 percent for policy I and in the range of 12 percent to 18 percent for policy II, it is quite fair and rational to be followed by the taxpayers.
