It’s a popular, if not foolproof, way for countries to boost their coffers without raising taxes: Declare an amnesty to give tax offenders a chance to come clean. Indonesia collected more than $11 billion in penalty payments from such a program, and other Asian nations may follow suit. An amnesty provides citizens with a window of opportunity to declare assets previously undisclosed to tax authorities. They typically pay a lower rate than they would normally owe and avoid legal prosecution. The strategy doesn’t come without risks.
Individuals and companies were charged between 2 percent and 10 percent in penalty interest, depending on how soon they joined the program and whether they only declare funds or repatriate assets as well. (They will keep paying regular taxes on repatriated assets going forward.) The nine-month amnesty period began in July 2016.