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inance Minister Bambang Brodjonegoro is understandably feeling under pressure because President Joko '€œJokowi'€ Widodo has specifically instructed that tax receipts for the current fiscal year be increased by Rp 100 trillion (US$8 billion) to Rp 1.44 quadrillion.

The tax-receipt target is quite challenging in view of the moderate economic growth of 5.2-5.6 percent projected for this year. Last year, when the economy was estimated to have expanded only by about 5.2-5.3 percent, the government also missed its tax revenue target.

Bambang warned last week that tax officials would step up tax audits and tax collection and expand the taxpayer base. The country has been notorious for massive tax evasion, as shown by its low tax ratio (tax receipts as a percentage of gross domestic product) of only about 12 percent, among the lowest in the ASEAN region.

Given the significant challenges and the inadequate capacity of the taxation directorate general, the minister even warned that the government would be more forceful in taking repressive measures against taxpayers with large tax arrears.

The tax laws do authorize the taxation directorate general to confiscate the assets of tax debtors, freeze their bank accounts and even imprison them as part of the law enforcement to encourage tax compliance. But such harsh measures would be taken only against tax debtors who do not show any good faith in settling their tax debts.

But Bambang and the new taxation director general, who is still being selected, should be serious about enforcing those repressive measures, otherwise the government will be considered to be merely bluffing.

In the early 2000s, then Taxation Director General Hadi Poernomo also threatened to jail big tax debtors. He even coined the idea of establishing a special jail especially for them. But inconsistent enforcement because of inadequate technical competence and a lack of tax auditors with a high level of integrity made the rules ineffective in discouraging tax arrears.

Bambang, however, seems more resolute in imposing repressive measures. As of early this month, for example, more than 500 big tax debtors, including 65 foreigners, have been banned from overseas travel. Jailing the most stubborn of the tax debtors, who refuse to show good faith in settling their tax arrears, could serve as shock therapy to force tax compliance.

The taxation directorate general should also support vigorous tax collection with more aggressive tax audits, optimizing its authority to access data on taxpayers'€™ assets, businesses and financial records from banks and other state and private institutions, as well as professionals such as accountants, public notaries and consultants.

This broad authority could greatly help the tax office improve its intelligence information and its ability to properly assess tax liabilities, verify tax compliance and identify and register new taxpayers. A more effective audit and tax intelligence information system would minimize the opportunity for tax evasion.