Thousands of Indonesian workers protest tax amnesty

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JAKARTA: Thousands of workers rallied Thursday in the Indonesian capital Jakarta against a controversial government scheme to raise revenues that, critics claim, has allowed wealthy tycoons to avoid paying tax.

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The tax amnesty program began in July, offering low rates to people who came forward to declare their untaxed wealth stashed at home and overseas.

Wealthy Indonesians have long chosen to stash billions of dollars abroad, particularly in neighboring city-state Singapore, to keep it out of reach of the taxman.

The government has thrown considerable resources behind the scheme, and hopes it will generate 165 trillion rupiah ($12.4 billion) in additional state revenue this year.

Some of Indonesia’s richest businessmen have participated in the scheme but the amnesty has angered unions and social justice groups, who claim it pardons tax cheats.

Signs waved by workers marching through Jakarta claimed the amnesty was unconstitutional, demanding it be rescinded immediately.

Suhan, a metal worker who like many Indonesians goes by just one name, said the scheme was unfair.

“For us, the workers, we pay taxes every month and if we don’t, we get fined,” he told Agence France-Presse.

“In terms of social justice this is extremely unfair for us.”

Said Iqbal, president of the Indonesian Confederation of Trade Unions, claimed the policy could allow criminals to declare dirty money hidden abroad.

“These funds coming in could be dangerous and from corruption, trafficking or drugs, and we are opposed to that,” he told reporters.

Large protests were also held in other major Indonesian cities. Apart from opposing the tax amnesty, workers are demanding an increase in the minimum wage.

The first phase of the amnesty—offering the lowest rates on undeclared assets—ends Friday, with penalties rising until the amnesty concludes in March next year.

President Joko Widodo is desperate for extra money to fund infrastructure projects as investment falls due to a slowing global economy, and the government believes improving its historically poor tax revenues will help. AFP

AFP/CC

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