Currently the DPR is collecting a DIM (Problem Inventory List) regarding the Draft Law on General Provisions and Tax Procedures (RUU KUP) 2021. One of the hot issues is “Tax Amnesty (TA) Volume 2” which is mentioned in the Academic Text of the 2021 KUP Bill as the Offshore Voluntary Disclosure Program (OVDP) or voluntary asset disclosure program.
Executive Director of the Pratama-Kreston Tax Research Institute (TRI) Prianto Budi Saptono said that the inclusion of the OVDP provisions in the 2021 KUP Bill shows weak data management at the Directorate General of Taxes. “This provision also shows the failure of the Tax Amnesty Volume 1 program in increasing the Taxpayer database,” said Prianto, Friday (10/9).
The OVDP provisions contained in Articles 37B-37D of the 2021 KUP Bill are a solution for the Directorate General of Taxes to pursue taxes from Offshore Tax Evasion (OTE) practices in the form of overseas tax evasion. In fact, the DJP found data that many taxpayers who were former TA Volume 1 participants had not fully disclosed their assets. As a result, the Directorate General of Taxes lost quite large potential state revenues from OTE behavior.
In fact, the Directorate General of Taxes could pursue these OTE tax evaders. However, practice in the United States (US) failed to pursue taxes from the OTE. At that time, the US collaborated with Switzerland to ‘force’ banks in Switzerland to provide bank balance information from US citizens. This collaboration was unsuccessful because the tax evaders actually diverted their funds from Swiss banks to other countries where banking secrecy was strict.
Finally, the Directorate General of Taxes chose OVDP which calls on Taxpayers to voluntarily re-disclose assets that have not been reported in the 2015 Income Tax SPT. This OVDP is actually a continuation of the PAS Final program (Voluntary Asset Disclosure with Final Rates) which was rolled out as a follow-up to TA Volume 1. The Final PAS provisions are contained in Minister of Finance Regulation no. 165/PMK.03/2017.
“When compared to the Final PAS tariff (the highest tariff is 30%), the OVDP tariff is much more attractive because it is only 15%, although it is still relatively high,” said Prianto. If the disclosed assets are reinvested in Government Securities (SBN) for 5 years, the Final Income Tax rate will only be 12.5%.
The helplessness of pursuing tax evaders who store their assets abroad means that the Directorate General of Taxes has limited fiscal space. It takes the form of a regulatory instrument that allows the Directorate General of Taxes to request assistance from the tax authorities of partner countries/jurisdictions to collect taxes. The billing process is related to taxes imposed by the Directorate General of Taxes and must be paid by the tax bearer whose assets are located abroad.
