Pardoning the Turkeys, I Mean the Tax Evaders

Despite the years I spent in the US I never quite understood the pardoning of the turkey by the President before Thanksgiving. Doesn’t matter how many times a well-meaning American tried to explain it to me, I always ended up wondering why anyone would need to pardon a turkey.

 

I guess the same dogged incomprehension is also what’s on some people minds’ about the tax amnesty program rolled out by the government in recent months. Doesn’t matter how slow, simple and patient a well-meaning official attempts to explain the intrinsic objective and benefits of tax amnesty for a country, there are always people shrugging it off as an easy swinging door for fat cats. If you’re one of those well-meaning souls, you have my sympathy. I’d rather focus on the ones already understanding the benefits and in the position to partake.

 

No doubt the real targets are seriously rich Indonesians who have undeclared and/or untaxed assets domestically or overseas. Yet interestingly, many people outside that bountiful bracket are just as keen to participate. While some of them do have stashed assets or unreported income, many of them simply fall into the category of having not reported investments or income streams that have been taxed to the final—upper-middle class folks who lead relatively normal, non-tycoon life and don’t practically owe the government back taxes in that respect.

 

A bigger, almost undiscussed group is taxpayers who are in the position to participate in tax amnesty yet harbor a huge doubt on how the government would make do of their repatriated financial assets. What are the Government’s solid plans to use these funds to boost the country’s economy growth? What if the economy remains stagnant and these assets won’t grow? What if the IDR keeps falling and these assets will devalue along? Are there even contingency plans in place? It’s not so much of the taxes they’ll need to start paying after repatriation, it’s really how much the assets will be valued in the future once repatriated.

 

Those are the questions floated around in small circles at certain boardrooms, dinner parties, art gatherings, overseas marathon trips, or even quiet evenings by an apartment compound’s private swimming pool. Reasonable questions, as money has neither religions nor passports, one must say. Almost no solid assurance in the form of sound plan coming from the Government, one also must say.

 

Another interesting thing also floated about in these circles is that while most expressed no doubt on Sri Mulyani Indrawati’s expertise in managing the country’s economy and finance, most acknowledged that the Government doesn’t solely consist of Ministry of Finance. There are other ministries with their own problems, agenda, and level of capacity that is well beyond what the Minister of Finance’s control and responsibilities. As a middle-aged businessman half-jokingly remarked, Sri Mulyani is a great colonel he’d happily go to war with but there are other colonels plus a commanding general whose prowess in growing the economy he seriously questioned. And if it’s on the mind of businessmen of his stature, imagine the doubts hanging on the back of real tycoons with massive assets to bet on.

 

As for me, while I’m in no immediate danger of becoming a tycoon, I do pay my taxes, and every single time I filed my annual tax returns I couldn’t help feeling a sense of helplessness in noticing that the largest bulk of my taxes would go to foot the payroll of useless parliament members, police squads that often forgot to protect and serve, and underperformed civil servants. That helplessness often turned into seething anger whenever I trekked outside the comfort of Java into horrible ports with no ship routes, hills without electricity, villages without decent schools, and so on and so forth. The President has been loudly touting the merits of digital economy, even went on to urge Indonesian SMEs to follow the giant footsteps of Alibaba, yet everyone who travels often enough into the central and eastern time zones of Indonesia understand that 3G is mostly available within the limits of province capitals and big towns. And here I thought President Jokowi has traveled around every Christmas and Lebaran.

 

Back to tax amnesty. From the Tax Office’s online dashboard as per 29th of September the fines of declared assets from around 234 thousand files are recorded at IDR 89 trillion of the IDR 165 trillion goal, while the declared assets hit IDR 2,798 trillion of the IDR 4,000 trillion target. Not too shabby, with one day remaining on the first cut-off date and both numbers have hit past the 50% mark. The fines will rise in coming months, yet the tax amnesty submissions shouldn’t necessarily grow less if the Government can come forward more convincingly in detailing their plans to boost the economy.

 

October 20th will mark the second anniversary of this administration. The citizens have been patient and, as the progress of tax amnesty suggests, remains relatively trusting and cooperative. But long-term trust must be earned. Now time for your bold move, Sirs.

Don’t make me go talking about turkeys on my next column.

As published: http://www.thejakartapost.com/news/2016/10/01/urban-chat-pardoning-turkey-i-mean-tax-evaders.html

 

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