Tax amnesty in line with global efforts to fight BEPS: Minister
Finance Minister Sri Mulyani Indrawati has said the ongoing tax amnesty program was in line with global efforts to prevent and combat tax base erosion and profit shifting (BEPS) and would not accommodate any money laundering efforts.
Tax amnesty programs have brought benefits to the many countries that have implemented them, Sri Mulyani explained at a press conference at the Finance Ministry in Jakarta on Wednesday. The press conference was held to debrief journalists about the outcomes from her attendance at last week’s World Bank (WB) – International Monetary Fund (IMF) annual meeting.
She highlighted that the tax pardon program was one of the government’s efforts to improve Indonesia’s taxation data and tax base.
“An improvement [of the tax amnesty program’s implementation] in the future will be useful in our efforts to increase Indonesia’s tax ratio, which is currently still very low. The tax amnesty did not accommodate all kinds of money laundering efforts related to drug and human trafficking or terrorism funding,” Sri Mulyani said.
During the WB-IMF meeting in Washington DC, member countries discussed efforts to prevent BEPS, a tax avoidance strategy used by multinational companies, wherein profits are shifted from jurisdictions that have high taxes to those that have low taxes – so-called tax havens.
Sri Mulyani said that understanding BEPS was very relevant to Indonesia’s efforts to implement tax amnesty program.
The minister said she had met with leaders of a Financial Action Task Force (FATF), a task force to combat money laundering and tax evasion, to explain that Indonesia’s tax amnesty policy was not being used to facilitate funds from money laundering practices. (ebf)