No Mercy for Shady Tax Consultants: Finance Minister

Jakarta Globe, December 29, 2016

Finance Minister Sri Mulyani Indrawati and the director general of taxation, Ken
 Dwijugiasteadi, in conversation during the minister's impromptu visit to the
tax office in Jakarta on Wednesday (28/12). (JG Photo/Tabita)

Jakarta. Finance Minister Sri Mulyani Indrawati said she will clamp down on tax consultants involved in tax evasion, as they are currently inundated by clients seeking their assistance to join the government's tax amnesty program.

"I've asked Mr. Ken [Dwijugiasteadi, the director general of taxes] to check out the tax identification numbers a many consultants," she told reporters on Wednesday (28/12).

"The consultants are cashing in big from the tax amnesty program. I've seen one who reported up to 30 asset declaration letters," she said.

Sri Mulyani made the comment during an impromptu visit to the headquarters of the Directorate General of Taxation in Jakarta, where she found employees from several tax consultancies submitting their clients' wealth reports.

"It's common practice in industrial countries; even individual taxpayers there use the services of tax consultants," she said. "But please don't try to lower [the value of taxpayers' assets] so they can receive the 0.5 percent tariff."

The government offers a 3 percent tariff for taxpayers who come clean on previously unreported assets abroad and agree to repatriate them. The government also offers a 0.5 percent tariff for small and medium enterprises with less that Rp 10 billion ($742,000) in total assets.

More than 170,000 taxpayers have joined the second part of the tax amnesty program and around 70 percent of them are small and medium enterprises, according to Hestu Yoga Saksama, director of counseling, service and public relations at the tax office.

The number of participants in the tax amnesty program, which started in July this year, has reached 563,000 by Thursday.

Tax director general Ken Dwijugiasteadi reported to the minister during her visit that the amnesty process is "under control" and that no emergency measures will be taken to address the lower-than-expected number of participants.

"Most of the high-wealth [individuals] have joined the first part of the tax amnesty, so the additional state revenue from the program will not be as high," Sri Mulyani said.

Despite the slower progress, the minister said she still "hopes for the best" and that each regional tax office has already prepared a plan to start the third part of the tax amnesty program in a bid to achieve a steady result.

So far, the government has collected Rp 106 trillion in total tax amnesty-related penalties – which include the 2 percent and 3 percent tariffs, payments of preliminary evidence from tax investigations and tax due payments – according to tax office data.

Taxpayers have also declared Rp 4,193.1 trillion in previously unreported assets and repatriated Rp 141.3 trillion so far.

The government has set a target of Rp 4,000 trillion in declared assets, Rp 1,000 trillion in repatriated assets and Rp 165 trillion in additional tax revenue.

"If the results at the end of the second part have not met our expectations, then I will step up the campaign in the last part," the minister said.

The tax office will not only focus on tax consultants in the last part of the tax amnesty program, which starts in January, Sri Mulyani said. Notaries, doctors, tax consultants, lawyers, architects, accountants, governors and executives of state-owned companies will be targeted next.

Jakarta's Christian governor stands trial for blasphemy

Yahoo – AFP, Kiki Siregar,  December 13, 2016

Jakarta Governor Basuki Tjahaja Purnama (C), is accused of insulting
the Koran (AFP Photo/Tatan SYUFLANA)

Jakarta's Christian governor choked back tears as he gave an impassioned defence against blasphemy charges on Tuesday, in a court case that has stoked fears of growing intolerance in the Muslim-majority nation.

Basuki Tjahaja Purnama -- the first Christian to govern the capital in more than 50 years -- is standing trial accused of insulting the Koran, an offence that carries a five-year jail term.

The governor has apologised for his controversial remarks, which angered Muslims across Indonesia and drew hundreds of thousands to the streets of Jakarta in protests larger than any seen in nearly two decades.

Facing court for the first time, the governor gave an emotionally charged defence against the charges, pausing several times to compose himself as he maintained his innocence.

"I know I have to respect the holy verses of the Koran. I do not understand how I can be said to have offended Islam," Purnama said, occasionally dabbing his eyes with a handkerchief.

Purnama, better known by his nickname Ahok, ignited a firestorm of criticism in September when he quoted the Islamic holy text while campaigning ahead of elections for the Jakarta governorship.

The governor accused his opponents of using a Koranic verse, which suggests Muslims should not choose non-Muslims as leaders, in order to trick people into voting against him.

Profile of Basuki Tjahaja Purnama, Jakarta's first non-Muslim 

leader in over 50 years, on trial for blasphemy (AFP Photo)

Politics at play

Prosecutor Ali Mukartono said the governor had "spoken a lie" and insulted Muslims, adding Indonesia's top clerical council had declared his remarks blasphemous.

But lawyers for the governor said their client never intended to commit blasphemy, and expressed concern that Purnama's case was being rushed.

President Joko Widodo and police, under pressure as protesters massed in November, promised to resolve the case quickly.

Critics say the controversy is as much about politics as religion, as the governor's foes whip up anger to reduce his support ahead of a hotly contested poll in February.

Purnama is running against two Muslim candidates in elections for city hall.

He had long been the favourite to win the election owing to the popularity of his no-nonsense style and determination to clean up Jakarta, a crowded, polluted metropolis of 10 million.

But the scandal has eroded his chances of victory, with his opponents gaining ground since Purnama was named a suspect for blasphemy in November.

Purnama said he was raised a Christian but surrounded by Muslims, including family friends, who had played an enormous mentorship role in his life from when he was a child to adulthood.

The allegations that he had offended their religion hurt him very deeply.

Jakarta's governor Basuki Tjahaja Purnama, nicknamed 'Ahok' faces jail 

if convicted of blasphemy in a trail demanded by hardline Muslim demonstrators

(AFP Photo/Adek BERRY)

"I am very sad," he said, his voice cracking.

"This accusation is the same as saying I have offended my god parents and siblings, whom I love and they love me back."

He also listed the many services he had provided for his Islamic constituents, including the construction of mosques, support for religious schools and donation of sacrificial cows on sacred days.

A small band of his supporters kept vigil outside the court as a larger congregation of hardline Islamists chanted "Jail Ahok" and held signs depicting Purnama in prison garb behind bars.

"We will continue to fight this, and won't be provoked or influenced," one of Purnama's supporters said.

The high-profile case has gripped the country. The courtroom was surrounded by police on Tuesday, with the proceedings being broadcast live on national television.

The case has emboldened hardliners, analysts say, who have long opposed a Christian as governor and have used the blasphemy scandal to push their conservative agenda.

Rights groups want Indonesia's archaic blasphemy laws overhauled, arguing they are exploited to persecute minorities.

The case has adjourned until December 20.

Indonesia's Richest One Percent Controls Nearly Half of Nation's Wealth: Report

Jakarta Globe, Tabita Diela, December 01, 2016

A housewife in the slum area of Kapuk Teko in Jakarta drying her laundry in
 the sun. Many people in living in Indonesia capital live in poverty. (Antara
Photo/Rivan Awal Lingga)

Jakarta. A recent report on global wealth distribution showed that the top 1 percent of Indonesians remain in control of half of the country's wealth despite a dent from weak global commodity prices, reflecting a wide wealth disparity that is unlikely to narrow anytime soon.

The seventh Global Wealth Report by Credit Suisse Research Institute shows that the richest 1 percent of Indonesia's adult population of 164 million own 49.3 percent of the country's $1.8 trillion wealth by June this year, a drop from last year's 53.5 percent.

Indonesia is also the world's fourth most unequal country, according to the study. Russia's wealthiest 1 percent owns 74.5 percent assets in the country while in India 58.4 percent and in Thailand 58 percent.

"These numbers showed that social justice in Indonesia is yet to be seen," Eric Alexander Sugandi, an economist with the Jakarta-based think tank Kenta Institute, said. The report found Indonesia is also home to 30 million of the so-called bottom billion, who own less than $248 worth of assets.

Despite the drop this year, the share of the top 1 percent wealth to the overall population is still trending upward, as they keep accumulating wealth through inheritance and investments, Eric said.

"Indonesia does not have inheritance tax like Japan. So the one percent's wealth would be multiplied and unlikely to be caught up by the rest of the population," he said.

Lana Soelistianingsih, an economist from Samuel Assets Management said, the top one percent could have suffered from weak prices of global commodities, mainly coal and palm oil, which made up most of the country's billionaire's assets.

Indonesian coal benchmark price was $51.8 per metric ton in June this year, down 13 percent from $59.6 in June last year. Malaysia Palm Oil Futures was up just 2 percent to $618 per metric ton over the period.

Rupiah depreciation against the US dollar — which the report noted totaling 46 percent drop since 2011 — has also caused wealth decline per adult, the report said.

Still, the report also showed that the remaining of Indonesian population saw some increase in their wealth, which serves as a "source of finance for future consumption, particularly for retirement, and for reducing vulnerability to shocks such as unemployment, ill health, or natural disasters."

The median for wealth in Indonesia is $1,966 for every adult, up 22 percent from last year, the report shows. Indonesia's total household wealth grew by 6.4 percent in 2016 to reach $1.8 trillion this year with 88 percent of it in form of real assets like property and land, and the remainder was in financial assets like time deposits, bonds and stocks.

The number is projected to increase about 44 percent to $2.6 trillion over the next five years.

Indonesia added 13,000 new dollar millionaires in a year, which added up to 112,000 millionaires who owned a total wealth of $500 billion by mid-year 2016. The report defined wealth as the value of financial assets and housing minus the debts owed by households.

The report estimates that the number of dollar millionaires in the country will increase by 55 percent to 173,000 over the next five years.

About 84 percent of the adult population in the country owns less than $10,000, falling into the "frontier wealth" category — in which an adult's wealth is ranging from $5,000 to $25,000 — along with other countries like Ecuador, Egypt, Malaysia, Thailand and Tunisia, the report says.

Overall, the global wealth increased by 1.4 percent to $256 trillion, with Japan in the lead with a 19 percent wealth increase due to rate appreciation.

'We Will Never Stop Fight Against Corruption': Jokowi

Jakarta Globe, Carlos KY Paath & Eko Prasetyo, December 01, 2016

President Joko Widodo at the National Conference on Eradicating Corruption
in Jakarta on Thursday (01/12). (Antara Photo/Yudhi Mahatma)

Jakarta. President Joko "Jokowi" Widodo said one of his administration's main goals is to fight corruption and highlighted the hundreds of high-profile figures who have been given prison sentences for corruption as proof during a speech at the National Conference in Corruption Eradication, or KNPK 2016, in Jakarta on Thursday (01/12).

"Every government official, including me, is committed to the fight against corruption. We will never stop," Jokowi said.

According to the president, 122 House of Representatives and Regional Legislative Council members, 25 ministers or heads of institutions, four ambassadors, seven commissioners, 17 governors, 51 mayors and district heads, 130 state officials and 14 judges have been sent to prison during his administration.

"We should give ourselves a pat on the back. The fewer people go to prison, the more successful we are at fighting corruption," Jokowi told the audience at the conference.

"We want to keep improving the public service and make our system of government more effective. But we have three big problems: corruption, bureaucratic inefficiency and lack of infrastructure. We have to try to solve all of these at the same time," he added.

Jokowi said so far corruptors are still defying the law, though many of them had been arrested and imprisoned.

"Corruption is still a big problem. The situation is desperate but we shouldn't give up. Everyone has to get involved: government officials, lawmakers, law enforcers, the private sector and the public."