INDONESIA’s Jokowi administration has made an impressive Rp100 million (US$7.69 billion) through its controversial tax amnesty program but the boost to federal coffers does not appear to be the only upshot to the initiative.
Although unintended, another result of the program is this – an apparent increase in divorce cases among the country’s rich.
According to a Jakarta Post article, the wives of some billionaires have reported feeling “cheated” after they discovered through program that their husbands were richer than they let on.
The report quoted Ken Dwijugiasteadi, the Finance Ministry’s director for taxation, as saying that many of these angry wives have called him, demanding to know the extent of their husbands’ wealth.
“Someone at the end of the line asked, ‘Sir, can I get the information my husband has filed regarding the tax amnesty? I heard he declared that he owned many houses, while he has only declared that he owns one to me!” he was quoted telling a Thursday seminar when explaining one such case.
Ken, however, said he would decline these requests.
”When I told her that I couldn’t [give her the data] she retorted, ‘Are you trying to defend my husband?’ Then the ensuing family spat ends in divorce,” he said.
The official said there were many such calls made to him from these enraged wives.
He added that on the last few days before the Sept 30 deadline for the first phase of the program, members of the Businesswomen’s Association arrived in droves to events held to explain the initiative.
“Apparently, their actual purpose was to find leaks about their husbands’ assets.
“Tax revenue from stamp-duty has soared; it turns out that many people have also filed for divorce. As you know, applications for divorce need stamp-duties,” he was quoted saying.
The Jokowi administration rolled out the controversial tax amnesty program on June 28 in a bid to offset an impending budget shortfall on the back of sluggish economic growth and poor annual tax collection rates.
The government hopes that the program would help it raise IDR165 trillion (US$12.7 billion) in 2016, which would help it keep its budget deficit in check, below the legal limit of 3 percent of the GDP.
Under the program, Indonesians are offered low penalty rates for assets abroad or at home that were not previously declared.
A previous Bloomberg report said the rate changes in stages, beginning from 4 percent for declared assets that taxpayers choose to leave overseas, and up to 10 percent as the program draws to a close in March 2017.
Those who agree to repatriate their assets for a minimum three-year period are offered a rate of just 2 percent, as well as investment opportunities.
The first phase of the program, which offers the lowest rates on the undeclared assets, ended on Friday, Sept 30.
Many have protested against the program, saying it would allow wealthy tycoons who have stashed their riches abroad to dodge tax obligations.
A rally attended by thousands of workers was also held in the Indonesian capital of Jakarta on Sept 29, a day before the first phase deadline.