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lthough the official result from the General Elections Commission (KPU) for the presidential election will only be announced on July 22, eight reputable polling firms project that Joko '€œJokowi'€ Widodo and Jusuf Kalla won by a margin of 4 to 5 percent. Therefore, it is necessary that we try to comprehensively understand the ticket'€™s proposed economic policies '€” for now, those specifically related to tax collection.

There is an initiative to establish a semi-autonomous internal revenue administration (SARA) to replace the tax administration currently under the Finance Ministry. There are some prerequisite conditions that need to be fulfilled before exercising the SARA model.

Those include, but are not limited to, complete tax policy reform through tax intensification and extensification; firm and sustainable political commitment (i.e. approval and support from the House of Representatives); and sufficiently conducive social, political and economic conditions.

Robert Taliercio Jr. identifies that these semi-autonomous revenue authorities are designed with a number of autonomy-enhancing features, including a self-financing mechanism, boards of directors with high-ranking public and private sector representatives and sui generis personnel systems.

Many countries, such as Malaysia, New Zealand, Ghana, South Africa, Mexico and Peru, have established and implemented this type of tax administration.

The main reasons for this phenomenon come from the need to collect more sustainable revenue, better services and to improve governance in the tax sector.

The growing trend around the world is that tax revenue administration are being separated from finance ministries and granted the legal status of semi-autonomous authorities. Some governments that exercise this SARA model have been initially dissatisfied with the level and efficiency of revenue collection, especially in the face of fiscal deficits due to expanding public expenditures and heightened tax evasion problems.

Tax experts (e.g. Silvani and Baer, 1997, and Jenkins, 1994) have called for radical changes in tax administration in countries where the tax gap is large (i.e. 40 percent or more of the potential tax).

Similar to countries that have applied SARA, Indonesia'€™s tax system is also prone to several identified problems such as rigid civil service regulations that undermine an incentive structure and lead to poor performance; prevalent perception of corruption and collusion between taxpayers and officials; and rampant tax evasion.

The Finance Ministry'€™s directorate general of taxation initiated an extensive set of tax administration reforms in 2001 and had continued to implement them through 2008. The reform finally ended with a tax amnesty program called the Sunset Policy program in 2008. The government successfully brought about 5.6 million new taxpayers onto the tax rolls.

Yet, Indonesia'€™s tax ratio, or the ratio of tax revenue as a percentage of gross domestic product (GDP), has remained relatively stable at around 12 percent since 2008. This is well below our neighboring countries such as Malaysia (15.5 percent), Thailand (17 percent), the Philippines (14.4 percent) and even Vietnam (13.8 percent).

Nevertheless, it is not completely fair to blame this lingering problem only on the lack of capacity of tax officials. To provide some relevant justifications, the ratio of tax officials to population in Indonesia is 1:7,700, compared to Japan (1:818), Australia (1:1,000) and Germany (1:737).

There is also a slight decrease in the number of tax officials (31,825 in 2009 to 31,316 in 2012), causing worker overload.

The supporters of this more autonomous administration argue that this model provides greater efficiency in tax collection via financial and administrative independence; reduced corruption; de-politicization of tax administration; better recruitment system; and increased accountability.

Those opposed to this idea think that there will be strong resistance from the Finance Ministry bureaucrats who will lose their rent-seeking opportunities and limit room for tax evaders.

However, the idea is not without criticism. Some relevant parties see the weak performance of tax collection in Indonesia as not solely caused by institutional factors such as the complexities in the tax laws and weaknesses in tax administration.

Thus, they suggest that a redesign of tax administration or transformation to a model of SARA is not completely necessary.

In addition, there might be costs associated with this institutional redesign, which is not guaranteed to improve tax performance. Previous literature argues and provides evidence of successes and weaknesses of the SARA model in various countries.

Most of the existing literature has attempted to identify indicators affectcting tax revenue performance before and after the implementation of SARA.

The decision to adopt SARA is clearly not solely influenced by the internal administration calculations, but also covers broader political-economic considerations. If a country has a system of government that is effective in the sense that every policy is decided and executed with consistency and efficiency, then there is a tendency to adopt a model of SARA.

Further, the level of democracy also has an important effect. In a democratic political system, the decision to adopt SARA is not impossible. This implies that democracy is a more compromised form of fiscal exchange relationship between society and the state so that tax affairs should be given a place that is more autonomous and free of political interference.

Finally, as a tool to promote economic growth, alleviating poverty and increasing fiscal sustainability, whoever wins the election should consider designing a more autonomous tax administration and completely assess the impact of these reforms on the fiscal side in an effort to strengthen tax administration and to achieve a 16 percent tax ratio target.

In the case of Indonesia, it should be given complete autonomy regarding financial, personnel, administrative and procurement systems with perpetual succession from the Finance Ministry. Or in other words, it will be a special treatment entity, which is gradually spinning out from the Finance Ministry.