Progress on Tax Amnesty
The issue of the tax amnesty program took center stage in forums across the country. Many gatherings were conducted by official agencies and banks, including many held in various churches, to disseminate information on the tax amnesty. Most tax consulting offices have been overbooked and declined to accept new clients at the beginning of September to register for the first phase of the tax amnesty, which will conclude at the end of September.
Despite the skepticism of many analysts and people on the street, apparently the progress is encouraging. The initial target of the government was to receive Rp.165 trillion in revenue from charges from the tax amnesty, coming from approximately Rp.4,000 trillion of repatriation and declaration of domestic and overseas assets. Bank Indonesia was among the skeptics and predicted tax revenue of Rp.21 trillion, with Rp.18 trillion of revenue received in 2016, and the rest in 2017. However, the report released by the Directorate General of Tax announced that by the end of the third week of September 2016 more than Rp.1,500 trillion of repatriated and declared assets had been reported by taxpayers, while the amnesty charges received by the government have reached Rp. 53 trillion.
In the midst of these hectic events, the Central Board of Statistics reported another monthly trade balance surplus in August 2016, although the amount declined from July. The trade surplus in August 2016 reached $293.6 million, significantly lower than $513.6 million surplus reported in July 2016. Exports in August reached $12,632.3 million while imports reached $12,338.7 million.
At the same time, August 2016 saw deflation of 0.2% Inflation year to date has reached 1.74% while year-over-year inflation reached 2.79%. This level is very low based on historical records. Based on that performance, the Central Bank decided to slash the benchmark interest rate by 25 basis points to 5.00%.
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