This presentation was made by Kurnia Chairi, Indonesia, at the 12th Annual Meeting of OECD-Asian Senior Budget Officials held in Bangkok, Thailand, on 15-16 December 2016

1. Tax Amnesty
A Breakthrough in Indonesia Current Budget
1
Presented by: Kurnia Chairi
Deputy of Macroeconomic and State Revenue Anaysis, DG Budget

2. 2
Recent Macroeconomic dan Budget Posture
Tax Amnesty as A Breakthrough

3. 3
Recent Macroeconomic dan Budget Posture

4. 2017 Macroeconomic assumptions
Projections are more realistic and reflecting the current situation as well as opportunities
and challenges
Sumber: Kementerian Keuangan
INDICATOR
2016 2017
BUDGET OUTLOOK BUDGET
Economic growth
(%, yoy)
5.2 5.0 5.1
Inflation
(%, yoy)
4.0 3.2 4.0
3-MonthTreasury Bill (SPN)
(%)
5.5 5.4 5.3
Exchange Rate
(Rp/US$)
13,500 13,300 13,300
ICP
(US$/barrel)
40 40 45
Oil Lifting
(thousand barrel/day)
820 820 815
Gas Lifting
(thousand barrel oil equivalent/day)
1,150 1,150 1,150
• More conservative macroeconomic assumptions to measure the recent economic development and the impact
of government policies.

5. More realistic and credible 2017 budget
Provide more certainty for all stakeholders
Description (IDRTrillion)
2016 2017 Growth (%)
R-Budget Outlook Budget To R-Budget To Outlook
A. Revenue 1.786,2 1.582,9 1.750,3 -2,0% 10,6%
I. Domestic Revenue 1.784,2 1.580,9 1.748,9 -2,0% 10,6%
1.Tax Revenue 1.539,2 1.320,2 1.498,9 -2,6% 13,5%
2. NonTax Revenue 245,1 260,7 250,0 2,0% -4,1%
II.Grant 2,0 2,0 1,4 -30,0% -30,0%
B. Government Expenditure 2.082,9 1.898,6 2.080,5 -0,1% 9,6%
I. Central Government 1.306,7 1.195,3 1.315,5 0,7% 10,1%
1. Ministerial Spending 767,8 672,0 763,6 -0,5% 13,6%
2. Non Ministerial Spending 538,9 523,3 552,0 2,4% 5,5%
II. IntergovernmentalTransfer 776,3 703,3 764,9 -1,5% 8,8%
1. RegionalTransfer 729,3 659,1 704,9 -3,3% 6,9%
2.Village Fund 47,0 44,2 60,0 27,7% 35,7%
C. Primary Balance (105,5) (126,4) (109,0) 3,3% -13,8%
D. Surplus/Deficit (296,7) (315,7) (330,2) 11,3% 4,6%
% toGDP (2,35) (2,50) (2,41) 2,6% -3,6%
E. Financing 296,7 315,7 330,2 11,3% 4,6%
I. Debt Financing 371,6 387,8 384,7 3,5% -0,8%
II. Investment Financing (94,0) (91,5) (47,5) -49,5% -48,1%
III.Other Financing 19,1 19,4 (7,0) -136,6% -136,1%

6. 416.1
104.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
2011 2012 2013 2014 2015 2016 2017
6
Major current Budget Reform
… effective and sustainable budget
Pendidikan
Infrastruktur
Subsidi Energi
Kesehatan
Rp. Triliun
77,3
387,7
Subsidy Reform :Tax Reform :
•More realistic target
•Increase tax base byTaxAmnesty
Tax Revenue increases 13.5% from 2016 Outlook

7. 7
Tax Amnesty as A Breakthrough

8. 491.0
658.7 619.9 723.3
873.9 980.5 1,077.3 1,146.9 1,240.4
1,539.2
1,320.2
1,498.9
215.1
320.6
227.2
268.9
331.5
351.8
354.8
398.6 255.6
245.1
245.1
250.0
706.1
979.3
847.1
992.2
1,205.3
1,332.3
1,432.1
1,545.5 1,496.0
1,784.2
1,565.3
1,748.9
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
2,000.0
APBN-P Outlook APBN
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Rp Triliun
Pajak PNBP Series3
Composition of Government Revenue (%)
2007 2008 2009 2010 2011 2012 2013 2014 2015
2016 2017
APBN-P Outlook APBN
Tax Revenue 69,5 67,3 73,2 72,9 72,5 73,6 75,2 74,2 82,9 86,3 84,3 85,7
Non Tax Revenue 30,5 32,7 26,8 27,1 27,5 26,4 24,8 25,8 17,1 13,7 15,7 14,3
Government Revenue (trillion Rupiah)
Tax Non
Tax
Tax Revenue Increase significantly…
8

9. However, Tax Ratio is still low …
Tax Ratio Tax Ratio (include
Natural Resources)
9
Tax Ratio Comparison among Countries, 2013
(Source: OECD 2013)

10. Tax Amnesty as policy breakthrough
Expected to be strongly affecting the economy trajectory in both short and
long run
Accelerating Economic Growth through
Asset Repatriation, via several
transmissions:
 increase domestic liquidity;
 improve the stability of IDR currency;
 create lower interest rate;
 support investment growth.
ExpandingTax Base through more
Reliable, Integrated and Comprehensive
Database
More reliable calculation of tax revenue potential
Increasing More Sustainable Tax Collection in
both Short and LongTerm
ShortTerm : Collection from Amnesty Fee
LongTerm : BetterTax Collection based on better and larger
Tax Database
Tax Policy Reform
TaxAdministration Reform
• More effective and better targeted
law enforcement
• Improvement of IT and
communication system
• Enhancement of data
management
• Improvement of the human
resources capacity and capability
• Amendment of General Provision
andAdministration ofTaxation
Law*
• Amendment ofVAT Law*
• Amendment of IncomeTax Law
• Amendment of Stamp Duty Law
Tax Amnesty as the milestone of tax reform More reforms are coming
10

11. 11
 Elimination of that should be owed
 Administrative and criminal sanctions in the
field of taxation is removed
 The Requirement: uncover treasure and pay
ransom
What is Tax Amnesty ?
Disclosu
re
Payment
of RansomTariff x
Disclosure
Assets

12. Why Tax Amnesty ?
Start 2018 Amendment Law of Banking
to introduce the data
transparancy for tax
12

13. Declare on shore asset …
13
PERIOD I
JULY – SEPTEMBER
2016
PERIOD II
OCTOBER –
DECEMBER
2016
PERIOD III
JANUARY – MARCH
2017

14. Declare off shore asset …
Without Asset Repatriation 14
PERIOD I
JULY – SEPTEMBER
2016
PERIOD II
OCTOBER –
DECEMBER
2016
PERIOD III
JANUARY – MARCH
2017

15. Declare off shore Asset, and Realocate/Invest The
Asset in Indonesia  Special Tariff
15
Period I
Period II
Period II

16.  Government Securities Bonds
 Bonds by state-owned enterprises
 Bond by financing institution owned by the
Government;
 Financial investment in the bank's perception;
16
Financial
Market
Non
Financial
Market
 Infrastructure investment through the
cooperation of government and business
entities.
 Investment in real sector based on the priorities
identified by the Government.

17. Tax amnesty realization in the first three months of
implementation
Significant progress from the time it was launched, indicates the larger tax base
potentials of Indonesia taxpayers
TAX AMNESTY REVENUE
REALIZATION , In US$
(BASED ON TAX PAYMENT SLIP)
TAX AMNESTY REVENUE
REALIZATION , In US$
(BASED ON TAX DECLARATION LETTER)
7.14 Bn
0.03 Bn
0.23 Bn
7.4Bn
REDEMPTION MONEY(TPS)
PRELIMINARY EVIDENCE PAYMENT
TAXARREARS PAYMENT
186.52
Bn
10.33
Bn
71.52
Bn
268.4Bn
ONSHORE DECLARATION
OFFSHORE DECLARATION
REPATRIATION
5.71 Bn
0.19 Bn
0.71 Bn
6.6Bn
INDIV. NON MSME
INDIV. MSME
CORP. NON MSME
CORP. MSME
REALIZATION OF ASSET
DECLARATION FROMTAX
AMNESTY, in US$
Source: DG Tax, As of 30 September 2016, 18.00

18. 18
Indonesian Tax Amnesty is considerably as one of the most
successful
Proving the huge potential on Indonesia tax base
DECLARED ASSETS
REVENUE FROMTAX AMNESTY
26 66 115 202 263
1,179
3,540
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Irlandia
1993
Australia
2014
Afrika Selatan
2003
Spanyol
2012
Cile
2015
Italia
2009
Indonesia
2016*
2.3 4.1 7.2 7.9 13.3 17.7 19.7 19.7 21.8
59.0
97.1
-
20.0
40.0
60.0
80.0
100.0
120.0
Afrika
Selatan
2003
Irlandia
1993
Belgia
2006
Australia
2014
Jerman
2004
Spanyol
2012
India
1997
Cile
2015
Italia
2001
Italia
2009
Indonesia
2016*
NominalIDRTrillion,
NominalIDRTrillion,

19. 0.04%
0.12%
0.24%
0.35%
0.62%
0.76%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
Austalia Spain Italy India Chile Indonesia
0%
2% 2%
4%
8%
23%
0%
5%
10%
15%
20%
25%
Australia India Spain Italy Chile Indonesia
DECLARED ASSETS
REVENUE FROMTAXAMNESTY
Indonesian Tax Amnesty is considerably as one of the most
successful
Proving the huge potential on Indonesia tax base
Source: Deutsche Bank calculation, As of 28 September 2016
% of GDP
Penalty as % of GDP
19

20. Guarantee for
Sanction
Try To Attract with clear benefit for both Country and Tax
Payer
LowTariff
The
Purpose
of Fund
20
More Productive Spending
Guarantee by Law
Supported by Parliament
Provide more instrument for
investment

21. 21

22. Source: pajak.go.id/amnestipajak 22