Thousands of Indonesian union workers yesterday marched to the heart of Jakarta to protest against a government tax amnesty scheme, which is meant to plug a large budget deficit, but which they say unfairly pardons wealthy tax-dodgers.
The amnesty program, under which Indonesians are encouraged to repatriate previously undeclared overseas assets to avoid increasing penalties, was launched in July and is a top priority for Indonesian President Joko Widodo.
Almost US$200 billion of assets have been declared so far under the program, which is also meant to broaden Indonesia’s tax base, according to the finance ministry.
However, a rising number of blue-collar workers, who make up the bulk of the nation’s workforce, consider it unconstitutional because they say it forgives the past crimes of rich taxpayers.
Some of Indonesia’s wealthiest individuals, including tycoon-politician Aburizal Bakrie, Lippo Group chief executive James Riady and Hutomo Mandala Putra — a son of former president Suharto — are among more than 100,000 who have signed up.
“We workers have diligently paid our taxes, but these rich people and big corporations are being pardoned after not paying their taxes,” Confederation of Indonesian Workers Union president Said Iqbal told reporters before a peaceful march to the presidential palace. “These funds coming in could be from trafficking, drugs or corruption, and will all become legalized when declared through the tax amnesty.”
Iqbal said there could be further protests, including strikes, if the government continued with the amnesty.
His union, along with three other groups, have filed legal action against the amnesty at the Constitutional Court. That has created some uncertainty over its future, with a court ruling not expected for weeks.
Government officials have vigorously defended the program.
“We want people to understand that the tax amnesty is for Indonesia, to build Indonesia,” Indonesian Minister of Finance Sri Mulyani Indrawati told reporters. “We will make efforts to ensure people that putting their money in Indonesia is a good and rational option.”
The government is banking on the amnesty to bring in 165 trillion rupiah (US$12.6 billion) this year to help keep the budget deficit from breaching a legal limit of 3 percent of GDP.
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