Monday, 28 July 2008

Government sets deadline for tax evaders

The government will fine unregistered taxpayers 20% of their total taxes if they fail to register by the end of this year, as part of efforts to increase tax collections, a legislator said, quoted by Reuters Indonesia has a population of 230 million, but only four million people are on the tax register and just one third of those actually pay tax. Parliament is expected to pass a new tax bill in the third quarter in an effort to step up tax collections and tackle widespread evasion by providing incentives for people to be registered and taking stronger measures against tax dodgers.
"Starting next year, unregistered taxpayers will be fined," Melchias Markus Mekeng, the head of a parliamentary commission drafting the new tax law, said.
Mekeng said registered taxpayers will also be exempted from paying a departure tax paid for overseas travel from next year as incentive for people to register as taxpayers.
Under the current scheme, Indonesians and foreigners working in the country have to pay Rp1 million as departure tax at the airport for every overseas trip.
"The departure tax will be lifted in 2011, but in the transition period, starting 2009, people who have a tax ID will be relieved from paying the country's departure tax." Darmin Nasution, the Director General of Tax, said in an interview in August that he expected the number of registered taxpayers to reach 10 million by the end of 2008. Indonesia has set a tax revenue target of 609.2 trillion rupiah, or about 70% of the total budget revenue, this year. The finance ministry has forecast tax revenue will rise by 19% to 723.9 trillion rupiah in 2009.

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