JAKARTA After a slow start, Indonesia's tax amnesty program has picked up pace with 100,000 Indonesians taking part and declaring more than $110 billion of assets, the finance ministry said on Thursday.
Participation has surged this month, ahead of a Sept. 30 deadline to pay the smallest penalties charged for registering previously-unreported assets. Penalty rates are higher in the next two phases of the amnesty, which ends in March.
Some of Indonesia's wealthiest individuals, including Lippo Group chief executive James Riady, Inter Milan football club president Erick Thohir and Hutomo Mandala Putra - a son of the late authoritarian president Suharto - have signed up.
The participation surge is a relief for economic policymakers, some of whom fear a less than stellar amnesty would force the government to slash spending to contain a ballooning fiscal deficit.
"We are still optimistic about this program," President Joko Widodo told economists at the palace on Thursday. "I see a good move towards compliance, and in (people's) conscience that they have to pay taxes."
As of Thursday, more than 102,500 Indonesians had signed up since the July launch, and they declared 1,459 trillion rupiah ($111.50 billion) of assets.
Of that total, 483 trillion rupiah were declared overseas, and the rest at home. And of the amount declared overseas, 77.9 trillion rupiah - or 16 percent - is committed to be returned home, according to a government website giving daily updates.
Indonesians who declare assets overseas are not required to bring them home, but pay a lower penalty rate if they do.
To date, the program has generated 35.1 trillion rupiah in revenue, or 21 percent of the government target of 165 trillion rupiah.
Central bank governor Agus Martowardojo said a big factor in determining next year's economic growth, forecast at between 5.1-5.5 percent, would be the amnesty program's success.
"If repatriation is better, then growth will also be better," said Martowardojo, who warned parliament this month the program would only get a fraction of the government's target.
Ferry Wong, Citi's equity strategist, this week declared Indonesia's amnesty program one of the world's most successful, forecasting that up to 2,000 trillion rupiah of assets would be declared.
(Additional reporting by the Jakarta bureau and Masayuki Kitano in Singapore; Writing by Randy Fabi; Editing by Richard Borsuk)