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Jakarta Post

Breaking curse of Indonesia's tax revenue shortfall

  • Glenn Polii
    Glenn Polii

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

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Jakarta   /   Mon, December 23, 2019   /  09:59 am
Breaking curse of Indonesia's tax revenue shortfall Tax compliance: A number of taxpayers file their returns with the Jakarta Tax Office in Tanah Abang, Central Jakarta. Indonesia's tax-to-GDP ratio stood at 11.5 percent in 2017, the lowest in Asia and the Pacific. (JP/Nurhayati)

Another year, another attempt, another failure in collecting tax. Despite numerous tweaks and improvements over the last two decades, Indonesia’s tax administration has failed to generate a sustainable and meaningful increase in tax revenue over and above the pre-2000 levels. From conventional strategies — restructuring the organization, modernizing IT systems, developing data infrastructure — to high and risky moves like lowering tax rates, granting tax amnesties and offering tax incentives, all have been tried in the past 20 years. Yet, our tax administration is still performing poorly, is still a constant source of late-year anxiety for the government and is still a specter hanging over our economy. So what is wrong in our tax administration? Almost universally, the answer is low compliance. Compliance improvement has been the perpetual goal of the Indone...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.