Voluntary Disclosure Program, New Label of Tax Amnesty Volume II

The government and the House of Representatives have succeeded in jointly repeating the tax amnesty policy by passing the Law on Harmonization of Tax Regulations (UU HPP). Tax Amnesty volume II is renamed the Voluntary Disclosure Program (VDP)

The VDP will be implemented for six months (1 January- 30 June 2022) under two policy schemes.

The first policy will target 2016-2017 tax amnesty participants—both individuals and corporates—who have not had time to disclose their assets from 2015 and earlier.

In essence, these former tax amnesty participants are given another opportunity to declare, repatriate, and invest their assets domestically.

To be exempt from criminal tax sanctions, they are obliged to pay the final income tax as a tribute or ransom divided into the following three asset categories and rates:

• 11% for asset declaration
• 8% for repatriated foreign assets and domestic assets
• 6% for repatriated foreign assets and domestic assets which is invested in govt. securities/downstream/renewable energy

Policy II is intended for individuals—not corporates—who have not reported 2016-2020 acquired assets in the Tax Return. Unlike tax amnesty alumni, VDP participants are subject to tribute or final income tax at a higher rate.

• 18% for asset declaration
• 14% for repatriated foreign assets and domestic assets
• 12% for repatriated foreign assets and domestic assets which are invested in govt. securities/downstream/renewable energy.

In an online press conference, Thursday (07/10/2021), Minister of Finance Sri Mulyani Indrawati explained that this tax amnesty program vol.II to improve voluntary compliance of taxpayers.

"This Voluntary Disclosure Program is organized based on the principle of simplicity, legal certainty, and expediency," she explained.