PWYP Indonesia recorded the alleged total illicit money flow in Indonesia in 2014 amounting to Rp227.75 trillion or 11.7 percent equivalent of the 2014 APBNP. (CNN Indonesia / Safir Makki)

Jakarta, CNN Indonesia – The Publish What You Pay Indonesia Coalition said that Indonesia is in the 7th position of the countries with the highest illicit money flows. In the 2003-2012 period, Indonesia recorded funds flowing in the amount of Rp1,699 trillion or an average of Rp167 trillion per year.

“Using the same calculation method, PWYP Indonesia noted the alleged total illicit money flow in Indonesia in 2014 amounting to Rp227.75 trillion, equivalent to 11.7 percent of the total APBN-P in 2014,” said Maryati Abdullah, PWYP Indonesia National Coordinator in Jakarta, Sunday (10/4).

She detailed, specifically in the mining sector, 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, it indicates that the practice of tax avoidance and evasion in the mining sector is still rampant,” she said.
Meanwhile, 2015 Global Financial Integrity reports that every year developing countries lose one trillion US dollars due to corruption, tax evasion, and money laundering. GFI predicts that the potential for tax evaporating from Indonesia due to the practice of fleeing illicit money amounts to almost Rp. 200 trillion each year.

“The high flow of illicit money from Indonesia is due to the low level of tax compliance (rich, super-rich, and corporate taxpayers), high prevalence of tax corruption, embezzlement practices and tax evasion with complicated financial engineering methods, and low performance of Indonesian tax authorities,” said Dadang Trisasongko, General Secretary, Transparency International Indonesia (TII).

Panama Papers
Ah Maftuchan, Executive Director of the Prakarsa Association said that many entrepreneurs and world political elites were included in the Panama Papers list. This confirms that the dirty practices of tax evasion and avoidance have become a serious threat to countries in mobilizing tax revenue for development financing.

“The Panama Papers show that the world is in an emergency era of tax crime. This should be a momentum for the Government of Indonesia to immediately eradicate the practice of tax avoidance, tax evasion, and money laundering by Indonesian taxpayers, both individuals, and legal entities, “he said.

He said the President needed to immediately form an Anti-Mafia Tax Crime Task Force containing a credible combination of government and non-government institutions. The Task Force works to trace the list of names that enter the Panama Papers and other tax havens. (gir)