Long-Term Goal is to Strengthen the Economy

President Joko "Jokowi" Widodo has said that the purpose of the newly passed tax amnesty was not just to cover the budget deficit this year. In the long term, it was intended to strengthen the economy through a better taxation system so that in the future tax revenues would be higher.

"The purpose of the tax amnesty is not to cover the budget deficit, in the long term, it is intended to strengthen our economy through a better tax base, so that tax revenues will be higher," the President said in a meeting with a number of economic editors at the State Palace on Thursday.

Finance Minister Bambang PS Brodjonegoro, Agriculture Minister Amran Sulaiman, Presidential chief of staff Teten Masduki and Presidential spokesperson Budi SP attended the meeting.

The President mentioned a number of benefits that could be achieved if Law No. 11/2016 on tax amnesty was properly implemented. These benefits would include a stronger rupiah exchange rate, increased foreign exchange reserves, improved bank liquidity and increased state revenue.

When asked about several issues that still worried potential participants of the tax amnesty, the President said that so far conditions were good and nothing should be feared. Related to the confidentiality of taxpayer data, the President has formed a task force comprising the Development Finance Comptroller and intelligence.

"Confidentiality is guaranteed. The data provided by taxpayers cannot be used for investigation or prosecution, and cannot be given to anyone. Anyone who leaks this data can be taken to court," the President said.

Brodjonegoro said that amid uncertainty in the global economy, proceeds from the tax amnesty would be a new source for economic growth. Several changes would occur as a result of the program, including that data on people's assets overseas would be closer to real conditions as people would have correctly reported their assets and paid taxes.

With overseas funds being brought into Indonesia, private sector debt would fall because the funds would become business capital when repatriated. Foreign ownership of government securities would also decline because the funds currently invested in government bonds were actually owned by Indonesian citizens through companies abroad.

"Another consequence is foreign investment will fall, as it will partly become domestic investments. For instance, foreign direct investment, which has so far been from Singapore, will become domestic investment. So, it will not be because the economy is worsening, but because there is a change in fund status after repatriation," he said.

Meanwhile, regarding the suggestion by some parties that, for improved results, the tax amnesty would be better implemented in 2018, when the Automatic Exchange of Information, or exchange of tax information, would be formally launched, Brodjonegoro said the deal would be only related to the declaration of assets and there was no guarantee that the money would be brought into the country.

"We need fund flows and there should be clarification now. For example, if we postpone infrastructure projects, there will be additional costs in the future," he said.

According to the minister, currently some countries were offering a number of incentives to persuade asset holders to bring their assets to those countries.

Judicial review

Due to the judicial review proposed to the Constitutional Court by a number of organizations on the issuance of Law No. 11/2016 on tax amnesty, the government has formed a special team. In addition to setting up the team, the government also continues to identify strategic projects that could be funded with funds obtained under the tax amnesty.

Coordinating Minister for Economic Affairs Darmin Nasution said that the establishment of a special team had been discussed at the ministerial coordination meeting. 

The team comprises the Finance Ministry and the Ministry of Law and Human Rights, who will be directly in charge of dealing with the judicial review.

Several other ministries, as well as the State Secretariat, will be involved in its monitoring. Members will be taken from first echelon officials of each ministry involved. 

"The request for a judicial review is the right of every citizen. We are ready to conduct focus group discussions and monitor the process. Until now, the request for a judicial review has not been uploaded to the Constitutional Court's website," Darmin said.

Earlier this week, the One Justice Foundation (YSK) and the Struggle for Indonesian Justice Federation (SPKRI), along with four individuals, unveiled their plan to apply to the Constitutional Court for a judicial review of the Tax Amnesty Law. They are challenging Article 11 of the law with 12 reasons. One of these is that the Tax Amnesty Law pardons tax evaders.

At the same time, the Ministry of Finance's secretary general, Hadiyanto, said that the judicial review of the Tax Amnesty Law should not discourage people from taking part in the tax amnesty program. The substance of the law was to provide legal certainty for taxpayers.

The impact of the law is considered appropriate because the proceeds of the tax amnesty could be used for development projects. At present, his office has opened registration for those wanting to benefit from tax amnesty program.

He said that the Finance Ministry was finalizing regulations that would be used to implement the Tax Amnesty Law. At least three draft regulations are being prepared. The entire process is expected to be completed this week.

Source Kompas, Friday, July 15, 2016

To Whom Does Indonesia Belong

When Indonesia is mentioned, what is imagined is possibly a nation entity, a state institution, a territory consisting of tens of thousands of islands and an expanse of ocean, or an assemblage of people of around 235 million registered as its citizens.

Out of all of these, the most real and tangible is a group of thousands of islands and the sea, but the number and width is still disputed. This does not include, too, the ability to control and manage the entire contents of its wealth, whether under the earth, in the air or in the sea, our nation is still very weak.

The term and concept of a nation, since the beginning of independence, has been recognized as having serious problems because when Bung Karno and Bung Hatta proclaimed the independence of the Republic of Indonesia, the image of the Indonesian nation itself was not yet clear or intact. What there was, was "the imagined Indonesia", a political ideal that united several hundreds of tribes in the archipelago into the big house of the state of Indonesia. Even the word Indonesia itself is the creation of an expatriate, the connotation of which is a geographical position rather than the name of a nation.

Therefore, Bung Karno and Bung Hatta were not only called to be the proclaimers of independence but also the weavers and founders of the nation. They captured the desire of the archipelago's population to have its own home state and nation, to be sovereign and dignified after dozens and hundreds of years of being humiliated and blackmailed by a colonial power.

In political theory, there is a term known as "social contract", in which citizens hand over their sovereignty to the government for it to create prosperity and security, as well as to educate their offspring. The government, as the receiver of the mandate, is responsible for the trust given by the people in exchange for its agreed upon political authority, facilities and salaries. However, in reality, we became citizens of this state not as a product of voluntary choice and social contract, but rather a historical destiny.

The government may possibly view the power in its hands as the result of it seizing upon a struggle at high cost, so it does not feel guilty when it enjoys state facilities as if they were the result of their hunt. The destiny of Indonesian citizens is similar to other people's diversity, which is generally the product of historical-sociological destiny, not struggle and conscious choice, like someone who becomes a scholar. However, there are still opportunities for people to choose their own religion and citizenship after becoming an adult.

Dispute

There is no agreed theory on which island population has the oldest civilization in this archipelago. The collective memory, which is prominent and binds our social cohesion, is that the archipelagic people want to stand up and be united as a nation that is prosperous, advanced and civilized, free from various forms of oppression and ending social fragmentation based on ethnicity, tribe, religion or social class.

Therefore, even though Indonesia has declared itself to be independent from invaders, as the people see that welfare and prosperity have not materialized equally, they will continue to feel colonized. What has changed is the actors of the invasion and their modus. In fact, through regional elections and general elections, the people always update their social contract to give their sovereignty to the government through political parties, specifically with the expectation that their ideals of freedom can really be realized and felt. The question, which occurs when the regional elections and general elections are over, is whether the political parties are aware of the mandate given by the people and have chosen their best members so that they are able to realize the mandate of the people? At a glance, the portrait of this archipelago has aspects that have not changed over time. Namely, it is always the object of dispute for foreign powers that collaborate with the nation's actors. So, who is the captain who controls Indonesia?

It cannot be denied that there are many foreign powers and cultures that have contributed greatly to moving the archipelagic civilization forward, especially the influence of foreign education and the penetration of religious cultures. Hinduism, Buddhism, Islam and Christianity, all of which were incoming religions, have helped advance the civilization of the archipelago. Now there is another new religion: Confucianism. Interestingly, when religions enter and grow in Indonesia, they become more creative, thereby giving birth to a culture of diversity that is innovative, synthetic and more aesthetically pleasing compared to their place of origin.

Just look at the legacy of Prambanan temple, Borobudur and the Balinese Hindu communities, all of which are more beautiful than in India. The same also happens with Islam in Indonesia, which is richer in cultural dimension compared to that in the Middle East. The dimension of Islamic rituals remains the same and has not changed, but its social dimension is much more creative and richer than in Arab countries. The religion of Christianity for Indonesian Catholics is also the same. They understand far more about Islamic tradition than Christian communities in Europe and the United States because the factor of tribal fraternity helps form a bridge to create a harmonious interfaith and religious relationship. The tradition of Idul Fitri, for example, has become a national culture, not only celebrated by Muslims, and also has significantly strengthened social cohesion and inter-religious tolerance.

Generation of connoisseurs

But when it comes to political and economic solidarity, the picture and its problems are not as beautiful as the cultural aspects. There is no need to study to become an expert in observing the international economy and politics, we can see for ourselves the strength of the network of foreign investment and advanced industrial countries that dominates Indonesian natural resources and market share. Indonesia has the most raw materials needed by industrialized countries, but Indonesia itself finds it difficult to make the leap to become an industrialized country, so we are still only a nation of consumers.

Industrial society has an industrial mentality, which is different from agricultural and fishing communities. They are familiar and very aware of the meaning and function of modern technology to create added value in capitalizing on raw materials and natural resources. Innovation, competition and efficiency are the mantras for industrialized communities to boost their economies. They are conditioned to always be punctual and faithfully guard the process from upstream to downstream, right up to the process of marketing their products. In the marketing world, competition no longer relies on product quality, but on satisfaction and customer loyalty by adding aesthetic values, humanity and spirituality inherent to a product. The culture to serve is one of the elements of an industrialized mentality.

Unfortunately, nearly all the Islamic world is yet to experience the industrial revolution, even though the seeds of modern science, which are the pillars of industry, were initially invented by Muslim scientists in the middle ages. Perhaps only Turkey is relatively advanced in developing industry, a country that does not have oil resources like other Muslim countries. A Muslim county that is familiar with Western influences.

The main economic resources in the Arab world and Indonesia, for example, still depend heavily on the generosity of nature. The agrarian world does not develop, and has not entered the ranks of advanced industrialized countries. Meanwhile, foreign powers aggressively enter as economic players in Indonesia. The cultural ethos and understanding of religion grow but are always touted more as entertainment in the midst of rampant corruption and competition for political power. Borrowing the words of Ibn Khaldun, perhaps the post-45 generation has become trapped in a nation and generation of connoisseurs. A generation that is lazy, corrupt and never seriously carries out its historical mandate, which had been painstakingly built by the freedom fighters and which will, in turn, sink deeper into a generation of destroyers. If this is so, who really is the owner and authority in Indonesia?

by Komaruddin Hidayat

source Kompas, Thursday, July 14, 2016

Brexit, Time and People

There was a cat sitting quietly right in front of the door of Number 10 Downing Street, the official residence of the British Prime Minister. The time in London was 6:57 a.m. on Thursday, June, 23, 2016. As I saw through a CNN broadcast in New York, in terms of time, I was still lagging behind at 1:59 a.m.

The cat was just a moment there. Without being disturbed, the cat passed away. In the context of memory, the scene brought me to one of the scenes from the soap opera of Si Doel Anak Betawi, which was broadcast in the mid 1990s. When Benyamin, the father of Si Doel, received a letter informing him that Si Doel was accepted to work at an oil mine on an island far away from Betawi land, he was furious. The letter was squeezed and thrown into the front of the door. A cat, which thought it was food, tried to eat it.

"The cat at Number 10 Downing Street" of course did not come from Betawi. It was accidentally there when a CNN cameraman shot the door of the official residence of the British prime minister. Certainly, the presence of the cat was not relevant to the exit of Britain (Brexit) from the European Union (EU).

I did not record how much of a percent the downfall of the value of poundsterling was, when the cat moved away at 6:57 a.m., London time, or 1:59 a.m. in New York. At 12:21 a.m., New York time on Friday, the poundsterling fell by 13.22 percent against US dollar.

This was the effect of the British people, who in the historic referendum, chose that their country should go out of the EU. As of 11:08 p.m., as I saw on the CNN screen, those who chose to leave reached 51.20 percent in the referendum. Because -- as will be discussed below -- the "rational" expectation in the economic context was to remain (continue to be a member of EU), the value of poundsterling immediately tumbled when the "rational" boundary line was hit.

Human drama

When the direction or choice to leave was increasingly obvious, the leader of the United Kingdom Independence Party (UKIP) Nigel Farage through a CNN interview at 11:40 p.m., New York time, introduced a new phrase over the drama: Dare to dream. Initially, I only wrote the appearance of this phrase. The next day, after reading the Financial Times (FT, published on June 23, when the referendum took place), which I read on the New York-Amsterdam flight, I could better understand the phrase "dare to dream". The daily newspaper ran the results of a poll about a conspiracy theory.

It mentioned that 46 percent of Brexiters (those who wanted British exit from the EU) believed that the counting of the referendum vote would be rigged. The result of an experimental interview from Prof. Karen Douglas from Kent University on 400 samples produced interesting data: Most believed that not only would there be cheating in the calculation of the referendum results, but also that M15, the famous British intelligence institution, would be involved to help the Remainers (those who wanted Britain to remain in the EU) win. So when "Leave" won in the referendum, the feeling of relief among supporters was "shocking". This was the meaning of the above-mentioned phrase of dare to dream.

And for the naysayers against the Remainers, the victory was thought to represent the people. UKIP politician Ray Finch, who was interviewed by CNN at 1:50 a.m., New York time, on Thursday, said the referendum had caused more people to be more involved. What was meant by the people here was the less educated section of society. They, within the framework of the EU, felt helpless. Because, all the policies and economic orientation of Britain were determined by the elite.

"They want more protection," said a British political commentator in a conversation with CNN at 12:52 a.m., the New York time, on Thursday. So, if we want to conclude what Fay Fich emphasized, the movement of "Leave" was a people's struggle against the domination of the elite throughout the British membership in EU. "People"? To this end, I was suddenly faced with a conceptual confusion.

Because I wanted to smoke, I went out of the hotel at midnight, New York time. When I puffed the smoke, a white vagrant asked for my cigarette. When I turned him down, he took several steps away, then bowed. He took a cigarette butt on the edge of the highway. Without knowing the process, the butt had been ignited. And, near a dustbin, he inhaled it deeply. This encouraged me to give him a cigarette, which was received by his left hand.

However, suddenly I was startled by a black vagrant who approached me. With a face without expression, he demanded his right, the same as his white counterpart. While looking at his red eyes, I handed over a cigarette to him. While receiving this "poison", also with his left hand, he passed away.

I wanted to draw a dramatic line on purpose about what was meant by "the people" from the UKIP politician with the homeless of New York, who approached me nearly -- even though from different continents -- at the same time. I increasingly felt a subjective and strange feeling at 3:55 a.m., New York time, when CNN ran a text saying "PM Cameron resigns after Brexit vote". I went down again to the street. This time, I saw a black vagrant dragging a wheelchair. His jeans were torn so that he seemed to wear a skirt. After a silence for 10 minutes, he crossed the street of New York that was increasingly deserted. From the other side of the street, I saw him open dustbins in front of a Thai restaurant.

So, several minutes after Cameron decided to resign from his post in London, a vagrant in New York crossed a highway to scavenge for garbage, looking for something that can be utilized.

Local class versus global class

Even though he was criticized by The Economist for not taking the side of the market economic mechanism in his electricity mechanism several years ago, PM Cameron is the epitome of "global class" in the Brexit drama. The EU leaders were downhearted and "angry" with the result of the referendum.

As noted by the FT Weekend one day after, Friday and Saturday, June 24-25, there would be no renegotiation of British membership in the EU. They even demanded that Britain immediately negotiate the departure and the repeal of paragraph 50 of the EU treaty, namely the provision of a two-year time limit for the withdrawal of a country in the membership of the community. However, this was important, the anger was not aimed at Cameron. "EU officials said that their warning was aimed not at Mr. Cameron but at his successor."

Here it was clear that Cameron, together with supporters of Remain, were allies of the "global class". And their interests soon collapsed on that same day when Brexit became the choice of the people of England. FT Weekend noted: The value of poundsterling sank to a level 30 years earlier, the FTSE 100 index tumbled 8.7 percent at the open even though it bounced back to 4.3 percent, Lloyds dipped 21 percent, Royal Bank of Scotland fell 18 percent, and Deutsche Bank fell 14 percent. And the Euro Stoxx bank fell 17 percent, "back to the levels last seen at the eurozone crisis in August 2012," FT Weekend reported.

At the same time, US stocks also tumbled more than 2 percent when Wall Street actors "joined a global flight to safety", FT Weekend added.

However, is that the meaning of the "victory" for the "local class" in the Brexit drama? When interviewed by CNN at 4:21 a.m., New York time, on Thursday, Mayor of London Sadiq Khan said: "If the people of Britain want to gain access to the 500 million people in Europe, they should see Paris and Berlin." We can interpret that Sadiq wants the people of Britain to open their horizon view more widely. However, Sadiq' s emphasis was actually the fate of the British economy. Where will they trade if they forget or avoid interaction with the 500 million people on mainland Europe?

As a result, in essence the "victory" of the "local class" in the Brexit drama is the resistance of the timing and the flow of human progress. When UKIP politician Ray Fich stated the "people are more involved", what was meant was that British people of the lower class are increasingly losing in economics and with immigrants. Then, alongside the spirit of anti-globalism, the spirit of anti-immigration was increasingly felt. Brexit, apparently, marks the defeat of the British people against time and human progress.

by Fachry Ali

source Kompas, Monday, July 11, 2016 
Indonesian version can be read here