Tax Amnesty
Tax Amnesty is a government policy that grants amnesty to taxpayers on tax that should have been due, in exchange for paying a ransom fee upon disclosing unreported assets. Indonesia has run two programs: Program 1 (Law No. 11/2016, July 2016 - March 2017) with ransom rates of 2-10%; and Program 2 / Voluntary Disclosure Program (PPS) under UU HPP (Law No. 7/2021), January - June 2022 with rates of 6-18% for offshore assets and 4-12% for domestic assets. Participants receive assurance against audit of disclosed assets.
This article is for education, not tax advice.
Example
Mr Budi has a Rp 2 billion deposit in Singapore, unreported. In the 2022 PPS, he discloses the asset and pays an 8% ransom (offshore assets invested domestically) = Rp 160 million. The asset is now clean from a tax perspective.
Source: UU No. 11/2016; UU No. 7/2021 (UU HPP)
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