No need to worry about legal suit against tax amnesty law : Bank Indonesia

Bank Indonesia (BI) said there is no cause for worry about any move to file legal suit with the Constitutional Court against the tax amnesty law.

Central Bank Governor Agus Martowardojo said the government and the House of Representatives already considered such move when they gave their approval for the new law.

“I have seen there is always move to file a legal suit with the Constitutional Court against any new law. Therefore, I think it is just normal,” Agus said here on Monday.

Agus said the tax amnesty law approved by the House last month, had brought about positive sentiment resulting in strong inflow of foreign capital into the domestic financial market.

The rupiah value strengthened against the U.S. dollar with the growing inflow of foreign capital reaching Rp97 trillion until June 24, 2016, he added.

He said the new law has also succeeded in cushioning the impact of global financial turbulence triggered by Britain pulling out of the European Union in what was called Brexit.

Last Sunday, a group of people of Yayasan Satu Keadilan, and Serikat Perjuangan Rakyat Indonesia (SPRI) and a number of individuals, said they would file a law suit against the tax amnesty law with the Constitutional Court.

They claimed the law was not fair to the people and that it facilitated tax criminals instead of punishing them.

Earlier an analyst from the State run Gajah Mada University Awan Santosa said the law was against the countrys 1945 Constitution.

The law is expected to result in large fund repatriation to the country by rich Indonesian depositing funds abroad.

Awan said instead of investigating the sources of the suspicious assets, the government through the law would provide protection for trans national economic crimes.

Investigations should be made, which of the assets were a result of embezzlement of state funds that should be returned to the state, the director of the Mubyarto Institute said.

He said potential state revenue from the tax amnesty of around Rp165 trillion are not comparable with the estimated suspicious assets of Rp4,500 trillion to Rp11,400 trillion stashed away abroad over the past tens of years.

If the money were a result of crimes or embezzlement of state fund the owners had committed crime and responsible for impoverishing the people, he said.

Meanwhile, the Forum of Indonesia for Transparency of Budget (FITRA) led a group of people taking to the street protesting the law with a theme Let us take over People Sovereignty Over Budget.”

FITRA manager Apung Widadi said the law is against the Law No. 17 of 2013 on efficiency and transparency in finance.

However, a tax administration professor of the state run University of Indonesia Gunadi said the new tax amnesty law is in line with the countrys 1945 Constitution.

“It is based on the 1945 Constitution, therefore, no one should reject it,” the professor said commenting on protests against the law by FITRA.

Gunadi said FITRA had been wrong in interpreting the tax amnesty law, which was clearly based on the Chapter 23A of the state Constitution.

He said some people or groups may see the new law as unfair as they think tax evasion is a crime and the perpetrators should be punished as criminals.

He said the law would greatly benefit the nation as the fund from repatriation expected as a result of the amnesty could help cut the deficit in the state budget and finance the governments development programs.

Source: Antara News