Economic Analysis - Key Takeaways From The Tax Amnesty Programme - JUNE 2017

BMI View: While the outcome of the tax amnesty programme was not exceptional, we believe that there are three positive takeaways. It will likely help to enhance tax compliance in the country, increase the likelihood of reforms to the tax system, and facilitate the government ' s infrastructure development plan which is growth-positive.

Indonesia's tax amnesty programme (third and final phase) ended on March 31 2017, and although the overall result was mediocre, we note that there are three positive takeaways which we highlight below. In terms of asset declaration, the tax bill was considered a success, as the target of IDR4,000trn was already surpassed during the second phase of the programme, which ended on December 31 2016. However, the amount of additional revenue that was generated and the repatriation of assets were subpar, with both indicators falling short of the government's target, but was in line with our expectations ( see ' Slow Asset Repatriation Reflects Underdeveloped Business Environment', January 11).

What's Next?

Fiscal Position To Remain Fairly Stable
Indonesia - Budget Balance, % Of GDP

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