Jakarta. The Ministry of Finance will release a new regulation this week to make sure tax amnesty participants are exempted from income tax when transferring ownership of their houses or land as part of the ministry's efforts to maintain taxpayers' trust, Minister Sri Mulyani Indrawati said on Wednesday (15/11).
"We want to offer assurances to those who participate in the tax amnesty program," Sri Mulyani said in a press conference.
Sri Mulyani's comments come after a local news reported cases in which tax amnesty participants' requests for exemption certificates — which will free them from the obligation to pay income tax — are being rejected due to various reasons.
Indonesia's tax amnesty program encouraged taxpayers to come clean about previously unreported assets. In some cases, taxpayers own houses or land that are officially named after their relatives or colleagues.
In declaring their assets, taxpayers are required to transfer the ownership to their own name and the process will be exclude income tax if done no later than Dec. 31 this year.
The Finance Ministry issued a regulation last year that offered detailed guidelines for the tax amnesty program, coded 141/PMK.03/2016. The Ministry of Agrarian Affairs and Spatial Planning also had issued a regulation that ensures ownership transfers are free from income tax, coded 15/2017.
Still, tax offices across the archipelago have rejected about 20 percent of the 29,000 tax exemption applications so far. The tax office expects a total of 151,000 taxpayers to transfer their assets' ownership by the end of this year.
According to Sri Mulyani, the reasons of rejection are valid, owing either to a failure to provide necessary documents from the notary, or the data in the database did not match the actual asset, or the taxpayers did not go to the correct tax office where they are registered. The Finance Ministry and the Directorate General of Taxes will use this opportunity to evaluate their business process and to regain trust from taxpayers.
"For the last reason [of filing at an incorrect tax office], we will try to be more flexible," Sri Mulyani said, promising taxpayers that they will be able to take care of this issue at any tax office branch across the archipelago.
The new Finance Ministry regulation — which is scheduled to be released on Friday — will be a revision of the existing regulation coded 141/PMK.03/2016 and clauses will be added to reassure that tax amnesty participants are free from income tax when transferring their asset ownership. Upon the transfer process at the National Land Agency, showing a copy of the tax amnesty program participation will be enough.
The ministry will reveal the revision's details on the day of the launch.