Jakarta, CNN Indonesia – A number of non-governmental organizations that are members of the Fair Tax Forum are of the view that the names of Indonesian businessmen and political elites listed in the Panama Papers data are proof that Indonesia is in a tax mafia emergency.
Executive Director of the Prakarsa Association, Ah. Maftuchan said the Panama Papers revealed the dark practices of thousands of stealth companies and the behavior of thousands of super-rich people around the world in managing their finances. Panama is one of the tax haven countries so there is a strong suspicion that from the beginning they had a plan to avoid or avoid tax (tax avoidance).
Panama, said Maftuchan, is only one of the dozens of tax havens countries that provide facilities for corporations, super-rich people, and other criminals to avoid and avoid paying taxes. According to him, the number of businessmen and political elites who entered the Panama Papers list confirmed that the dirty practices of tax avoidance and evasion have posed a serious threat to countries in mobilizing tax revenues to finance development.
“The Panama Papers show that the world is in an emergency era of tax crime. This should be a momentum for the Indonesian government to immediately eradicate the practice of tax avoidance, tax evasion, and money laundering by Indonesian taxpayers, both individuals and legal entities, “Maftuchan said at the Transparency International Indonesia (TII) Office, Jakarta, Sunday (10 / 4).
He also proposed that President Joko Widodo immediately form an Anti-Mafia Tax Crime Task Force that contains a credible combination of government and non-government institutions. “The Task Force is working to investigate the list of names that enter the Panama Papers and other tax havens,” he said.
Maftuchan said several similar problems had also arisen before the Panama Papers, namely during the Luxembourg Leaks that occurred last November 2014.
“A data leak in Luxembourg which is also a country tax havens. It also intrigued the eyes of the world that the tax problem was very complicated and there were many crimes in it. The difference, at the time of Luxembourg Leaks, the world community does not feel that this is an issue that must be addressed immediately, “he said.
Meanwhile, International NGO for Indonesia Development (INFID) Program Manager Khoirun Nikmah said that the Panama Papers also showed the poor financial system and global economy. He believes that the economic system must be restructured immediately and Indonesia needs to spearhead changes in global financial governance related to the taxation system, the cessation of taxation and banking data confidentiality regimes, the exchange of information between countries, and the strengthening of legal, administrative, and taxation institutions.
“President Jokowi can use the G20 forum as a space to push for these agendas. In addition, the President can propose the formation of a World Taxation Agency under the United Nations (UN), “he said.
TII Secretary-General Dadang Trisasongko said Global Financial Integrity (GFI) in 2015 reported that every year developing countries lose the US $ 1 trillion due to corruption, tax evasion, and money laundering. GFI, he said, predicts that the potential for tax evaporation from Indonesia due to the practice of fleeing illicit money from Indonesia is almost Rp. 200 trillion every year.
“The high flow of illicit money from Indonesia is due to low levels of tax compliance, high prevalence of tax corruption, embezzlement practices, and tax evasion with complicated financial engineering methods, and low performance of the Indonesian tax authorities,” he said.
National Coordinator of Publish What You Pay Indonesia Coalition, Maryati Abdullah, said that Indonesia was in the 7th position of the countries with the highest illicit money flows. In the span of 2003 to 2012, Indonesia recorded funds flowing at Rp1,699 trillion, or an average of Rp167 trillion per year.
“Using the same calculation method, PWYP Indonesia recorded the total alleged illicit money flow in Indonesia in 2014 amounting to Rp227.75 trillion, equivalent to 11.7 percent of the total APBN-P in 2014,” she said.
Specifically in the mining sector, said Maryati, the value of illicit money flow was estimated at Rp23.89 trillion, of which Rp21.33 trillion came from illegal trade transactions and Rp2.56 trillion came from ‘hot’ money flows.
“In the midst of the low tax ratio in the mining sector, which only reached 9.4 percent, the practice of tax avoidance and evasion in the mining sector is still rampant,” she said.
With this problem, Maftuchan stressed that his forum urged the government to cancel the plan to grant a tax amnesty to the super-rich taxpayers and corporations because it would be counter-productive to efforts to optimize tax revenue.
“This will also be a step forward to tax law enforcement and money laundering. In addition, tax amnesty will reduce the level of taxpayer compliance to pay taxes, tax amnesty will weaken the authority of the government in the presence of super-rich people and corporations and tax amnesty will injure small-medium taxpayers who have been obedient to pay taxes, “said Maftuchan.
Source: here.