(Bloomberg) -- Indonesia will discuss reviving its tax amnesty program next year as President Prabowo Subianto’s government seeks ways to boost state revenue and broaden the tax base.
The newly-appointed parliament decided to add a Tax Amnesty Law revision to its list of priority bills for 2025, following a plenary session in Jakarta in Tuesday. Lawmakers will discuss a new tax amnesty, to follow one that ended in 2022, with the revised law taking effect as soon as next year, according to the chairman of parliament’s finance commission, Mukhamad Misbakhun.
A tax amnesty can help build a tax base, Mukhamad said, noting there will be technical discussions with the government on the matter.
The potential tax amnesty signals the government is looking for a quick way to raise state revenue next year. Weaker commodity prices risk reducing tax receipts at a time when the government is also preparing massive spending plans, threatening to breach the budget deficit cap target of 2.5% of gross domestic product for 2025.
If revived, this will be Indonesia’s third such amnesty after 2017 and 2022. In the last round, the government collected 61 trillion rupiah ($3.9 billion) in revenue, less than half of what was collected in the first round, with many observers having warned that a second amnesty risked dissuading tax compliance.
--With assistance from Norman Harsono.
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