The Indonesian House of Representatives (DPR) appears determined to once again pardon tax offenders through the proposed Tax Amnesty Volume III.
Since November 2024, the Draft Law amending Law Number 11 of 2016 on Tax Amnesty has been included in the 2025 Priority National Legislation Program (Prolegnas).

That effort, however, failed to produce results, leading to the reintroduction of the Tax Amnesty idea into the 2026 Priority Prolegnas.

Yet, this aspiration seems unlikely to materialize. Finance Minister Purbaya Yudhi Sadewa has firmly rejected the proposal to grant another round of amnesty for tax violators.

He argued that Tax Amnesty Volume III would send the wrong signal to Indonesia’s taxation system.

“It tells taxpayers that breaking the rules is acceptable because another amnesty will eventually come. If tax amnesty is granted every few years, then everyone will just hide their money and wait for the next round,” Purbaya explained during a media briefing at the Ministry of Finance in Jakarta, Friday (September 19).

“Every few years we launch a tax amnesty — there has already been the first and second rounds, and then maybe a third, fourth, fifth, sixth, seventh, eighth. The message becomes: ‘Just cheat on your taxes, there will be another amnesty.’ That cannot be allowed!” he stressed.

Tax forgiveness itself is not new. The first Tax Amnesty program ran from 2016 to 2017, during which the government pledged it would be a one-time policy to encourage disclosure of previously hidden assets.

The first round was joined by 956,793 taxpayers, revealing Rp4,854.63 trillion in assets. From this, the government collected Rp114.02 trillion in redemption fees, or 69 percent of the Rp165 trillion target.

However, that promise was broken with the implementation of the Voluntary Disclosure Program (PPS) from January 1 to June 30, 2022. A total of 247,918 taxpayers participated, disclosing Rp594.82 trillion in assets, generating Rp60.01 trillion in income tax for the state.

Responding to this, Prianto Budi Saptono, Executive Director of the Pratama-Kreston Tax Research Institute (PK-TRI), cited Article 23A of the 1945 Constitution, which requires that taxation for state purposes must be established by law.

“The discussion of the law (Tax Amnesty Volume III) must be conducted jointly between the government and the DPR. If one party is unwilling, then the law will never exist,” Prianto told CNNIndonesia.com on Tuesday (September 23).

He warned that too frequent tax amnesties would undermine compliance. Law-abiding taxpayers would feel unfairly treated.

Moreover, compliant citizens pay taxes at regular rates, while tax evaders benefit from discounted rates.

“As a result, compliant taxpayers may conclude that being noncompliant is better since the burden is lighter. Research across many countries shows that the more often tax amnesties are implemented, the higher noncompliance rates become. Instead of improving compliance, tax evaders will simply wait for the next amnesty,” he explained.

Prianto emphasized that the Finance Minister’s task is not just to reject Tax Amnesty Volume III, but also to build a taxation system rooted in the paradigm of service and trust.

On the service side, the tax authority must improve service quality by upholding principles such as ease of administration, system simplicity, fairness, and legal certainty.

On the trust side, better service from the Directorate General of Taxes (DGT) should encourage voluntary compliance.

“The tax authority should not rely on a cop and rob paradigm, where officers act like police and view taxpayers as criminals. Such an approach only enforces compliance through coercion,” Prianto explained.

He also stressed the need to fix the coretax system, which remains unstable, frequently experiences downtime, and prevents taxpayers from accessing services smoothly.

Tax Amnesty Volume III is Not the Solution

Head of Macroeconomics and Finance at INDEF, M Rizal Taufikurahman, praised Finance Minister Purbaya for rejecting the idea of a third tax amnesty.

However, he noted that Purbaya’s rejection does not automatically eliminate the DPR’s insistence on pushing the program. He pointed out that Prolegnas serves merely as a long list of legislative agendas.

“Legally, the key remains in the ‘joint approval’ between the executive and the legislature. Without government support, tax amnesty cannot become law,” Rizal stressed.

He added that Purbaya’s stance serves as both a political and fiscal signal that the government refuses to sacrifice the credibility of the tax system for short-term revenue. With consistent opposition, the DPR’s push would only result in legislative noise, not actual policy.

Rizal observed that tax amnesties only provide temporary fiscal relief, as seen in the 2016 program and the 2022 PPS, which boosted redemption payments and asset disclosures but failed to structurally improve Indonesia’s tax ratio.

He noted that the tax ratio remains stagnant at around 10 percent of GDP.

“Meanwhile, the institutional costs are enormous — offering incentives to evaders, creating moral hazard, and fostering perceptions of unfairness among compliant taxpayers. In short, short-term revenue gains are outweighed by long-term compliance costs. In the 2025–2026 fiscal consolidation framework, any policy that erodes tax credibility is counterproductive,” he argued.

“If the worst-case scenario occurs — that Tax Amnesty Volume III is forced through — taxpayers will rationally delay their obligations in expectation of future amnesties. This is not just a risk; it’s a recurring pattern already observed since 2016,” Rizal cautioned.

He urged the government to explicitly declare “no more tax amnesty” as a firm commitment to prevent moral hazard.

Rizal also called for greater transparency in government audits, the reduction of special policies that weaken the income tax base, and regulatory simplification to sustainably strengthen the tax ratio.

According to him, tax amnesty only widens the trust deficit. The real solution is a data-driven enforcement shock based on coretax, beneficial ownership, and inter-agency integration.

“Tax Amnesty Volume III is not a sustainable fiscal solution but rather a fiscal illusion. The government must consistently reject it and focus on structural reforms through coretax, intensification, and expansion of the tax base. An improved tax ratio can only be achieved through long-term compliance, not repeated amnesties that undermine the nation’s credibility,” Rizal concluded.