Jakarta (Antara Bali) - The draft law on tax amnesty bill is against the country's 1945 Constitution, an analyst from State run Gajah Mada University said.
The government proposed the draft law hoping to encourage repatriation of funds of rich Indonesian invested or parked abroad.
It is expected to be passed into by the House of Representatives in a plenary session here on Tuesday.
Instead of investigating the sources of the suspicious assets, the government through the draft law would provide protection for trans national economic crimes, Awan Santosa of the People's Economic Study Center, of the University said.
Investigations should be made, which of the assets were a result of embezzlement of state funds that should be returned to the state, the director of the Mubyarto Institute said here on Monday.
He said potential state revenue from the tax amnesty of around Rp165 trillion are not comparable with the estimated suspicious assets Rp4,500 trillion to Rp11,400 trillion stashed away abroad over the past tends of years.
If the money were a result of crimes or embezzlement of state fund the owners had committed crime and responsible for impoverishing the people, he said.
"The state should never give in to the interest of individuals," he said.
Tax fraud involving funds of Indonesians stashed away abroad should be dealt with through Automatic Information Exchange System, which has been signed by the government to be effective next year, he said.
The Automatic Information Exchange System would make tax fraud impossible abroad, he said.
"There would be no more place for frauds and thousands of trillions of rupiahs could be recovered," he said.
He said the country needs tax reform with the state taking control of all strategic sectors to prevent state assets stolen by individuals to be deposited abroad.
Meanwhile, Executive Director of Center for Indonesia Taxation Analysis Yustinus Prastowo said momentum is important in the debate on the tax amnesty bill.
Apart from being important as a factor in tax income target in the amended 2016 state budget, there would be less interest in the tax amnesty if decision made on the draft law was delayed too long, he said.
He said he hoped the Commission XI of the Parliament and the Finance Ministry would reach agreement on a number of important issues related to the implementations to be issued by the the finance minister when the tax amnesty bill has been passed into law. as the implementation of the law.
The important issues are not only about tariffs and periods, but also about government's readiness in providing necessary infrastructure and competence and socialization of the law, he said. (WDY)
