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The Jakarta Post
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OECD urges Indonesia to carry out tax reform

  • Ayomi Amindoni
    Ayomi Amindoni

    The Jakarta Post

Jakarta | Tue, October 25, 2016 | 08:04 am
OECD urges Indonesia to carry out tax reform South Jakarta tax officers affix a tax notification poster to a reception area at Killiney Kopitiam cafe in Pondok Indah Mall 2, Jakarta, in September. (Antara Photo/Rosa Panggabean)

Tax reform is among the necessary factors highlighted by the Organization for Economic Cooperation and Development (OECD) for the government to boost the economy in the long term, a senior minister has acknowledged.

Coordinating Economic Minister Darmin Nasution said the OECD was concerned about low government spending in Indonesia due to limited state revenue. The low tax ratio in Indonesia compared to other countries is among the country’s structural fiscal problems.

“They recommend that it’s important for Indonesia to carry out tax reform. They know we’re running a tax amnesty program and it could be a basis to improve the taxation system,” he said after a bilateral meeting between President Joko “Jokowi” Widodo and OECD secretary-general Angel Gurría at the State Palace, Jakarta, on Monday.

The OECD also called for the improvement of IT for taxation administration to support tax reform, Darmin added.

He added that during the meeting, the President elaborated on several government efforts. “The President also explained that Indonesia is currently preparing and encouraging vocational education. The President has said it will be a massive program in the future,” he said.

Apart from the bilateral meeting, Gurría will launch the OECD-Indonesia Joint Work Program for 2017-2018 while in Jakarta, along with the 2016 Economic Survey of Indonesia and the 2016 Open Government Review of Indonesia.

Finance Minister Sri Mulyani Indrawati and National Development Planning Board (Bappenas) head Bambang Brodjonegoro are scheduled to attend the event. (ags)