Euromoney, May 2017
Indonesia’s tax amnesty is being widely described as the most successful of its kind anywhere in the world. As of March 31, $366.6 billion had been declared, compared with a $300 billion target. It is rare that Indonesia sets a target and beats it by 20%.
A closer look at the data reveals some interesting footnotes. One is where all that money has been residing.
The assumption, when the amnesty was announced, was that it was going after the billions of dollars and trillions of rupiah squirrelled away offshore, chiefly in Swiss and Singaporean banks – mostly in Singapore.
Yet according to information released from Indonesia’s ministry of finance, to date, $276 billion of that $366.6 billion of declarations involved money that was onshore. The offshore declarations, at $79.4 billion, are considerable, no question about it. But they represent just 21.7% of the total. Four out of every five dollars disclosed in the amnesty has been hiding in plain sight in Indonesia.
The other thing that leaps from the data is that declaring it a success depends very much on how one measures success. As a disclosure, it beat all expectations. But the hope was that the money would be repatriated too. In fact, the $11.2 billion of repatriations represents only 15% of that target (perhaps because most of it turned out not to be offshore after all, so there was nowhere to repatriate it from).