Indonesians Tax Amnesty (human conflict)

Car and real-estate sales data suggest the amnesty is resulting in people putting off purchases. Indonesian property companies had achieved only 46 percent of 2016 pre-sales targets by the end of September, with many developers attributing the slowdown to buyers focusing on the first window of the tax reprieve, Aurellia Setiabudi, an analyst at PT Maybank King Eng Securities in Jakarta, said in a note released Tuesday. PT Astra International reported a 13 percent decline in sales of non low-cost cars in September, the biggest drop in a year. Sales of Nissan Motor Co. and Suzuki Motor Corp. vehicles fell 40 percent and 34 percent, respectively, according to figures from the Indonesia Automotive Industry Association.While the amnesty should be good for vehicle sales in the longer term, it could be causing a slowdown in sales of higher-end vehicles at the moment, said Jongkie D. Sugiarto, one of several chairmen at the auto association in Jakarta.

It’s not just companies selling big ticket items that are being affected. High-end supermarket operator PT Supra Boga Lestari is down 5.5 percent since the end of August, and PT Ace Hardware, which sells home supplies and furnishings to middle-class Indonesians, has lost 14 percent.
In a nation where only 4 million people out of a population of 258 million pay tax, the amnesty is aimed at broadening the revenue base and allowing the government to have a more stable stream of income to finance infrastructure development and social spending. After a slow start to the amnesty, there was a surge in uptake in September as the window for getting the lowest tax rate closed, taking the total amount of penalty fees to 97.2 trillion rupiah at the end of last month. The government is targeting 165 trillion rupiah for the entire reprieve, which runs through March, and some 424,286 individual and companies have taken part so far.

 People who participate in the program will have to raise money to pay for their redemption penalties, especially if they are declaring non-liquid assets like companies or homes. If I joined this program, of course I spent a few hundred million rupiah to participate in this program, so I needed some breathing space before I could start spending again. Actually this program has many big effects in positive ways, such as increase our economy to develop our country.


Reflection based on http://www.bloomberg.com/news/articles/2016-10-28/discretionary-stocks-hit-by-amnesty-as-indonesians-curb-spending