Jakarta. Indonesia's government has issued new regulations aimed at tracing and taxing the wealth of taxpayers who were not pardoned in the nine-month tax amnesty that ended in March.
Around 972,000 taxpayers joined the amnesty program and declared assets worth a total of Rp 4,881 trillion ($368.07 billion). About 24 percent of that was held offshore, mostly in Singapore, and only a small percentage of it was pledged to be brought back home.
President Joko "Jokowi" Widodo vowed last year to implement a "tax law enforcement" program in 2017 following the amnesty. His finance minister, Sri Mulyani Indrawati, warned tax dodgers that if they did not join the amnesty, they would face "hell".
But the government later acknowledged that tax amnesty declarations and the pledged repatriation of offshore assets back to Indonesia did not correspond to data it had on taxpayers' foreign holdings.
In a guide to the new regulations, the government said it had also detected onshore assets that were not reported under the amnesty and had not been obtained with taxed income.
"Given that condition, after the tax amnesty program ended it must be followed by law enforcement in the taxation field," it said.
The regulation calls for all assets that were not reported or were misreported in the amnesty program, and which were obtained between Jan. 1, 1985 and Dec. 31, 2015, to be treated as untaxed income.
The estimated value of the undeclared assets has not been made public.
If the assets are found by authorities before July 1, 2019, they will be subject to a final income tax of 30 percent for individuals, 25 percent for companies, and 12.5 percent for special cases.
That compares with personal income tax rates of 5-30 percent and corporate income tax rate of 20-25 percent. Indonesia does not have a wealth tax.
Earlier this year, Indonesia's government granted tax authorities wider access to information on customer accounts at banks and other financial institutions.
Starting next year, the tax office will also get data on Indonesian taxpayers assets kept in jurisdictions that are signatories to the OECD's Automatic Exchange of Financial Account Information in Tax Matters.
Indrawati has previously said Indonesia's tax-to-GDP ratio of below 11 percent was "hard to swallow" and she was committed to raising it to 16 percent by 2019.
The average tax-to-GDP ratio among OECD countries is 34.3 percent.