Tax Amnesty Funds To Be Used For Boosting Banks' Capacity

Jakarta (Antara Bali) - The OJK expects that funds sourced from the passage of the tax amnesty bill should be used to increase the capacity of the country's banking industry.

"If the tax amnesty bill is passed we hope a lot of funds will come in. So why do we not think of how the funds can be used for increasing the capacity of our banks," the chief executive for banking supervision at the Financial Service Authorities (OJK), Nelson Tampubolon, said at his office on Thursday.

He said entering the current ASEAN Economic Community era, the capital of small banks must be boosted so that they have the capacity to compete.

He further said he is thinking of increasing the minimum core capital of banks under Book 1 Category or banks with a core capital of below Rp1 trillion to more than Rp1 trillion," while funds are likely to come and seek outlets. Let us just open the option."

The government is now also preparing investment instruments to accommodate funds, including through a portfolio or direct investment.

The potential funds to be repatriated following the passage of the tax amnesty bill are estimated to reach Rp560,000 trillion.

A leading member of the House of Representatives has said the debate on the controversial tax amnesty bill can be wrapped up in May.

The Chairman of Commission XI of the House, Ahmadi Noor Supit said on Wednesday that it would be impossible to finish the debate during this period of parliamentary session.

"I think we can rush to finish it before the draft revision of the state budget is passed into law. Hopefully, we could do it at the end of May," Ahmadi said after a meeting with Vice President Jusuf Kalla.

He said the parliament will also invite a number of academicians, business leaders, and economists to discuss and study the bill.

"We will prioritize the understanding of the Commission IX lawmakers, therefore, we will invite economic players, Kadin and other business organizations, such as Hipmi and Apindo, as well as experts, both those known to be in favor and against the bill," he said.

He also 16 experts have contributed opinions about the bill over the past three days.

The Commission will also visit a number of tertiary educational institutions to discuss the tax amnesty bill, he said.

"We will also invite PPATK (Financial Analysis and Reporting Center), KPK (the Corruption Eradication Commission), the police and the attorney general, so that everything is clear," he stated.

Meanwhile, House Speaker Ade Komarudin said he hopes the debate on the bill will be wrapped up before the revised draft of the state budget is passed into law.

"We have discussed it with the Vice President, and we agreed on the schedule before the draft revision of the state budget was passed into law," he said, stressing its importance for the nation.

Earlier this month, the government proposed the tax amnesty bill for the parliament, but the House decided to put off debate only saying there are things that need to be consulted with the government.

The lawmakers were split over whether to approve or to reject the bill. The controversy is also sharp in the public, with the labor union threatening to stage a massive demonstration, on Labor Day on May 1 if the government continues to push for the approval of the bill.

On Wednesday, President Joko Widodo had said the government is ready with an alternative to increase tax revenue if the tax amnesty bill fails to become law.

"We have prepared a government regulation if the debate on the tax amnesty bill is stalled," the President said while giving no details.(WDY)