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Laws 2017, 6(4), 16; doi:10.3390/laws6040016

Tax Policy in Action: 2016 Tax Amnesty Experience of the Republic of Indonesia

School of Law, Politics and Sociology, University of Sussex, Freeman Building, Brighton BN19QE, UK
Received: 1 July 2017 / Revised: 14 August 2017 / Accepted: 25 September 2017 / Published: 28 September 2017
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Abstract

Tax amnesty programs are often used by governments to improve tax compliance and to increase tax revenue. However, the policy choice to provide a tax amnesty often results in adverse consequences, including the violation of other legal rules. For this reason, the policy choice to offer a tax amnesty (‘tax amnesty policy’) is often controversial. The tax amnesty policy and resulting program offered by the Government of Indonesia has been criticized both because it is considered to be unfair and because it favors the perpetrators of tax evasion. In particular, the tax amnesty law offered special treatment to taxpayers who participated in the program, such as no checking of the source of funds, no checking of the financial statements reported by law enforcers, protection from punishment on the financial reports provided to the Director General of Taxation, and the requirement to pay only a small penalty. Tax amnesty programs also provide the potential for money laundering. This is certainly the case in Indonesia. In addition, tax amnesty programs weaken law enforcement in Indonesia; in particular, in the areas of corruption and money laundering. This is because law enforcement officers cannot investigate the perpetrators of white-collar crime that benefit from the tax amnesty program. Under the terms of the tax amnesty program, the financial data is not accessible by them. View Full-Text
Keywords: tax amnesty; money laundering; Indonesia; financial crime tax amnesty; money laundering; Indonesia; financial crime
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Said, E.W. Tax Policy in Action: 2016 Tax Amnesty Experience of the Republic of Indonesia. Laws 2017, 6, 16.

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