Jakarta. Finance Minister Purbaya Yudhi Sadewa disapproves of tax amnesties, as the senior economist feared forgiveness would only build a bad habit among Indonesia’s taxpayers.

This policy allows evaders to voluntarily disclose their wealth and make redemption money payments in exchange for avoiding penalties. An amnesty also grants forgiveness of tax liabilities from the previous reporting periods. Indonesian lawmakers have set the tax amnesty in their priority legislation. Southeast Asia’s biggest economy has issued two tax amnesties over the past 10 years, both taking place during Former President Joko “Jokowi” Widodo’s reign.

Speaking to reporters Friday, Purbaya said that it’d be better to take better advantage of existing policies rather than forgiving the evaders just for the sake of boosting state revenue. He fears that the disobedient individuals and firms would treat the amnesty as another loophole.

“If we keep launching tax amnesties, then what would happen to its credibility? It would only send the wrong signal to our taxpayers that it is okay to break the rules because there will be another amnesty,” Purbaya told a presser in his office.

“Let’s just optimize the existing regulations by bringing down tax evasion to a minimum. ... We can also drive the economy,” Purbaya said.

A tax amnesty was in place between 2016 and 2017, the first of its kind for Indonesia in the past decade. In this rollout, the government recorded nearly Rp 4,900 trillion ($294.9 billion) in declared assets and Rp 135 trillion worth of redemption money. They also repatriated about Rp 147.1 trillion. The country then launched another tax amnesty in 2022, during which taxpayers disclosed Rp 594 trillion in wealth and paid about Rp 61.1 trillion.

Indonesia aims to collect approximately Rp 2,400 trillion in taxes next year, up by 13.5 percent compared to the target that it had set for 2025.

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