Hide the Ferrari, Pay Your Tax: Jakarta Graft-Buster Is Back

by Karlis Salna Yudith Ho Andrew Mayeda

All over Jakarta, people may soon start hiding their Ferraris. That’s because Indonesia’s graft-busting Finance Minister Sri Mulyani Indrawati, who was more or less driven into exile in Washington six years ago after trying to clean up corruption, is back in town. On her reform agenda: lure back what Jakarta officials estimate is more than $300 billion that fled to Singapore and elsewhere during Indonesia’s periods of political turmoil, out of the hands of the nation’s tax collectors; reduce the number of domestic tax cheats; and take up reform of the tax office itself, which she had to abandon in 2010 when the opposition against her plans grew too fierce.

"I’m not coming back to Indonesia to create fear," said Indrawati, the 54-year-old economist and former World Bank managing director who speaks softly but carries a big mandate. "Indonesia is not really in a crisis, but definitely some action needs to be done immediately because of our budget plan."

The urgency is why President Joko Widodo lured her home from Washington with promises of the political cover to make it work this time. Widodo, known as Jokowi, wants to get back that stashed overseas money and increase domestic tax revenue by using an ambitious amnesty plan aimed at raising 165 trillion rupiah ($12.5 billion) before it ends in March. Spending that money and more earmarked for railways, roads and ports is key to his plans to boost economic growth to his target of 7 percent during his term, up from the average of less than 5 percent in the past two years. And Indrawati may well be the force who can make it happen.

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Source : Bloomberg

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