Money

Hey Rich Kids, the Tax Office Is Keeping Track of All Those Flashy Watch Pics

A new initiative targeting tax cheats may finally stop people from constantly bragging about their luxurious lifestyle on social media.
August 31, 2018, 9:25am
Illustration by Dian Permatasari

You might want to think twice about flexing on Instagram, especially if you're hiding some money from the taxman.

The Indonesian tax office says it plans to lurk on social media this year to see if people's flashy Insta-life matches up with their tax returns. Iwan Djuniardi, the director general of information technology transformation (ICT), told local media that his team is using a social media network analytics system (SONETA) to connect social media accounts to financial records like stock holdings, business networks, and family relationships. It will then examine all this data to estimate how much someone probably owes in income taxes (PPh) and value-added taxes (VAT), and compare it to what they actually paid the government, Iwan explained.

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Indonesia routinely struggles to get people to pay the correct amount of taxes, or even pay their taxes at all. There more than 250 million people in Indonesia, but only 32 million registered taxpayers, according to recent government estimates. And in previous years, only one million of those registered taxpayers actually paid what they owed, explained a 2014 report from the Economist.

Today, the tax office is only 53 percent to its annual target with only one quarter left in the fiscal year. Meanwhile, President Joko Widodo's administration is trying to push ahead with a series of needed—and expensive—infrastructure projects that are costing the government billions of US dollars. It needs money to foot that bill, and, so far, it's struggled to get people to pay up.


Watch: The Illegal Big Cats of Instagram


The tax office has tried other ways to increase its annual take. There was an ambitious tax amnesty program that aimed to bring in Rp 1,000 trillion ($467.8 billion USD), but it fell far short of that goal, netting only Rp 147 trillion ($9.9 billion). Now, the tax office says it will take a more aggressive approach to tallying Indonesians tax bills by catching rich Indonesians who are, effectively, snitching on themselves on social media.

And here's the thing: this kind of initiative has worked remarkably well elsewhere. All over the world, the 1 percent have gotten caught dodging taxes because of evidence gleaned from social media posts, mostly those of their Instagram-obsessed kids. In court cases, photos from these #RichKidsofInstagram have been used as evidence in 75 percent of the tax fraud charges brought to trial, according to cybersecurity firms.

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Here in Indonesia, the tax office has been lurking on social media for years. Last year, the tax office's official Twitter account threw some shade at actor Raffi Ahmad when he posted an image of his new luxury car online. "Remind Raffi to report his additional assets when he files his annual tax return," the tweet read.

Some are now wondering whether all this social media snooping is actually an invasion of people's privacy.

"Perhaps taking it out the social media is a little bit too far," Sarman Simanjorang, then the deputy chair of Jakarta's Chamber of Commerce and Industry, told local media.

Maybe. But this isn't exactly a popular opinion, probably because it's pretty difficult to feel bad about people whose Instagram is full of photos of Italian sports cars, Swiss watches, and European vacations.

But there's also another way to convince people to pay their taxes. Studies found that citizens of corrupt countries are less likely to pay their taxes, because they assume the money is just going to end up in someone's pocket, instead of funding the construction of a new airport terminal.

Indonesia is… well… pretty corrupt. On a recent ranking of countries based on their perceived levels of corruption, with 1 being the least corrupt (New Zealand) and 180 the most (Somalia) by Transparency International, Indonesia came in 96. That makes it more corrupt than China, Malaysia, and South Korea—the last two being countries only recently rocked by massive graft scandals that unseated those in power.

So maybe all Indonesia needs to do to increase its tax revenues is weed out all the corrupt politicians. Err… on second thought… lurking on social media is probably way easier.