Tax Amnesty Volume 3: Opportunities and Challenges in Improving Tax Compliance

Indonesia is planning a program again Tax Amnesty Volume 3 in 2025. This tax amnesty program is the government's effort to increase tax compliance while improving state revenues. Previously, Indonesia had implemented Tax Amnesty Volume 1 in 2016–2017 and Tax Amnesty Volume 2, known as Voluntary Disclosure Program (PPS), in 2022. Each of these policies comes at the right momentum, such as the Panama Papers in 2016 and the implementation Law on Harmonization of Tax Regulations (UU HPP) in 2022.

Why Does Indonesia Still Need a Tax Amnesty?

The level of tax compliance in Indonesia is still relatively low. One of the main causes is the lack of it tax literacy, so that many people do not understand their tax obligations. In addition, a culture of tax compliance that has not been well established means that many taxpayers tend to avoid paying taxes properly.

Currently, the government is preparing Core Tax Administration System (Coretax), a system that integrates all tax data, including information about savings, asset ownership, and business transactions. With this system, there is no longer room for taxpayers to hide assets that should be reported. Before the system is fully implemented, Tax Amnesty Volume 3 is the last opportunity for taxpayers to disclose their assets without being subject to heavy sanctions.

Pros and Cons of Tax Amnesty

Program Tax Amnesty always causes debate. From the side pro, this policy provides an opportunity for taxpayers to improve their compliance without the risk of large fines. Apart from that, this program also helps increase state revenues significantly in the short term.

However, from the side against, Tax Amnesty considered unfair to taxpayers who have been compliant from the start. This program actually benefits those who previously did not report their assets correctly. There is also the concern that if Tax Amnesty continues to be held periodically, taxpayers will deliberately delay their compliance in the hope of future tax amnesty. Therefore, Tax Amnesty Volume 3 must be followed by law enforcement policies (law enforcement) which is stricter so as not to create moral hazard.

Post-Tax Amnesty Education and Law Enforcement

Success Tax Amnesty Volume 3 relies heavily on effective education and outreach to the community. The government needs to ensure that all taxpayers understand the benefits and consequences of this program. Massive information must be provided so that there is no reason for taxpayers to avoid reporting their assets.

In addition, after this program ends, the government must implement it law enforcement stricter towards taxpayers who remain non-compliant. Thus, this program is not only a short-term solution but also a strategic step in building a stronger and more transparent tax system.

Impact of Tax Amnesty for Business Actors and Issuers

For business actors and issuers, Tax Amnesty Volume 3 be an opportunity to adjust their financial reports to comply with tax regulations. Many companies have so far business schemes that do not fully comply with tax regulations, thereby risking sanctions in the future. As is Tax Amnesty, companies can report undisclosed assets and profits without incurring large fines.

There are many cases where commercial financial reports differ from fiscal financial reports. This often happens to companies that have large profits but do not report them correctly, either due to administrative errors or certain business strategies. Tax Amnesty Volume 3 provides an opportunity for these companies to make corrections before the system Coretax fully running.

Preparations that Taxpayers and Companies Must Make

To make use of Tax Amnesty Volume 3 Optimally, taxpayers and companies must prepare early. Some steps that need to be taken include:

1. Re-register assets that have not been reported – Whether in the form of property, vehicles, shares or other assets.
2. Re-examine business transactions that have not been recorded correctly – For example, a business scheme that does not comply with tax regulations.
3. Adjusting financial reports – So that there are no large differences between commercial and fiscal financial reports.
4. Study the technical policies of Tax Amnesty Volume 3 – To understand the reporting procedures and benefits obtained.

Conclusion

Tax Amnesty Volume 3 be a great opportunity for taxpayers to improve their compliance before the system Coretax implemented thoroughly. However, this program also poses challenges, especially in ensuring that this policy is not misused. Therefore, apart from giving taxpayers the opportunity to report their assets, the government must also implement stricter law enforcement after this program ends.

With good education and a clear enforcement strategy, Tax Amnesty Volume 3 can be a positive step in strengthening the national tax system and increasing state revenues in a sustainable manner.

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