Indonesia Bans Travel By Major Tax Debtors
As part of the Indonesian Government’s drive to improve tax administration and compliance, the Ministry of Finance recently announced that, following a proposal from the Director General of Taxation (DGT), it has placed a temporary ban on overseas travel by senior personnel of 147 companies and 21 individuals.
The action taken is said to be only the beginning, as a total of 402 companies and 85 individuals, with tax debts amounting to IDR3.32 trillion (USD268m), are being considered for such six-month travel bans.
“A ban on tax debtors to get out of Indonesia is being used as a temporary measure,” said Deputy Minister of Finance, and also Acting DGT, Diaswati Mardiasmo, during a press conference. “In accordance with Act No. 19 of 2000, (the ban) is being applied selectively to those with a tax debt amounting to IDR100m or more, and where there is doubt as to their good faith to settle their tax debts.”
At the beginning of his presidency, Joko Widodo has made improved tax compliance a priority in order to increase Indonesia’s tax ratio and provide additional revenue for development purposes.
In that respect, on December 15, Indonesia also announced an updating of the existing double taxation agreement with its neighbor Singapore, to include the most recent international standard on exchange of tax information.
