Thursday, 6 October 2016

Amnesties international

INDIA and Indonesia share a problem: too little tax revenue. Of the 3.8% of India’s 1.3 billion people whose incomes are logged by the tax authorities, barely one-quarter cross the tax threshold. The share of Indians who declare annual incomes of more than 1m rupees (about $15,000) is just 0.1%. Among Indonesia’s 255m citizens, 27m are registered taxpayers. But in 2014 only 900,000 of them filed a return.

Indonesia’s tax-to-GDP ratio is around 11.4%—better than India’s 10.8%, but well below the OECD average of more than a third. Many people are simply not paying their dues. Both countries are stepping up efforts to bring dodgers in from the cold.

India, where an amnesty on undeclared domestic income expired on September 30th, has been stricter. Penitents, many of whom received warnings that they were being monitored, had to surrender 45% of their newly declared income. The government expects to rake in $4.4 billion from the 64,275 people who turned themselves in. That will dwarf the amount taken from a similar campaign last year, which targeted overseas income. In that one, India earned $373m from 633 individuals who owned up.

Indonesia has been...Continue reading

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