Facts should drive tax reform debate

Glenn Polii
Staff member at the Directorate General of Taxation at the Finance Ministry

PREMIUM

Jakarta / Tue, October 17, 2017 / 12:32 pm

To go with full reform, there should be no doubts that the current system is broken. (Shutterstock/File)

The first bill in a series of tax laws due for revision has been submitted to the House of Representative for approval, and the long-awaited deliberation might start as soon as November. Following the general provision bill, the income tax and value-added tax bills are next in line for a comprehensive reform of the tax code. It is important, however, that before the debate on tax reform begins in earnest to clear up some confusion so the actual debate on the law can really revolve around the most important issues. The number-one issue to be clear about is the reason for tax reform. To go with full reform, there should be no doubts that the current system is broken. For 11 years from 2001 to 2011, revenue collection on average reached 99 percent of the government’s estimate. From 2012 to 2016, however, revenue collected by the central government had fallen to an average of ...