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View all search resultsHashim urges stronger tax collection, warns of capital flight risks
Kadin advisory board chairman Hashim Djojohadikusumo, who is also President Prabowo Subianto's younger brother, said Indonesia's state revenue amounted to just 12 percent of GDP, compared with 18 percent in Cambodia and 23 percent in Vietnam.
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Special Presidential Envoy on Energy and Climate Change Hashim Djojohadikusumo (left) slices a 'tumpeng' (rice cone) on Nov. 10 during the opening ceremony of the Indonesian Pavilion at the United Nations climate change conference (COP30) in Belém, Brazil.
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ndonesian Chamber of Commerce and Industry (Kadin) advisory board chairman Hashim Djojohadikusumo has blamed weak tax collection for the country's low state revenue, saying Indonesia could generate an additional Rp 1.5 quadrillion (US$82.6 billion) annually if it matched Cambodia's tax-to-GDP ratio.
Hashim said Indonesia's state revenue, including taxes, excise duties and non-tax revenue, amounted to just 12 percent of recorded gross domestic product (GDP), compared with 18 percent in Cambodia and 23 percent in Vietnam.
He argued that the gap reflected weak revenue collection rather than a lack of economic potential, saying Indonesia should be capable of achieving at least the same ratio as Cambodia.
“As a nation, we are not inferior to Cambodia. Our DNA is not inferior. We are just as capable and intelligent as Cambodians. We should be able to reach 18 percent. We are currently under-collecting Rp 1.5 quadrillion,” Hashim, who is also President Prabowo Subianto’s younger brother and special envoy for climate and energy, said at Kadin's national leadership meeting in Jakarta on Thursday.
He cited estimates from the World Bank that 30 to 40 percent of economic activity in Indonesia remained unrecorded, which he said amounted to around Rp 10 quadrillion in transactions.
He attributed the gap partly to cash-based transactions that went undocumented, including everyday services for which customers did not receive receipts, leaving value-added tax (VAT) uncollected.
Hashim said the government had begun addressing the problem by expanding electronic tax collection using artificial intelligence, with the aim of bringing Indonesia's revenue ratio up to Cambodia's level within two to three years.
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