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Jakarta Post

Indonesia needs tax-savvy leader: NGOs

  • Hasyim Widhiarto

    The Jakarta Post

Jakarta   /   Sun, March 16, 2014   /  02:33 pm

A coalition of Jakarta-based NGOs has called on presidential aspirants to publicly share their plans on how to increase tax revenue, as the country is in dire need of public support to finance its future development.

The coalition, known as the Independent Commission for State Budget (KAI), said presidential hopefuls, for example, must reveal their target on the level of tax revenue-to-gross domestic product (GDP) ratio, or tax ratio, should they become official candidates.

'€œSuch a target is needed to gauge the [presidential] candidates'€™ commitment to the generation of state budget that is pro-justice and pro-welfare,'€ tax policy consultant and coalition activist Yustinus Prastowo told a press conference over the weekend.

The coalition, whose members include members from the Indonesian Corruption Watch (ICW), The Indonesian Forum for Budget Transparency (Fitra) and Islamic organization Nahdlatul Ulama'€™s Human Resources Research and Development Center (Lakpesdam), is also predicting that the country'€™s tax ratio could increase to 16 percent in the next five years should the new government be able to introduce innovative tax policies, like the integration of tax-collection system with various government bodies and revision of tax brackets in order to increase tax revenue from high-income taxpayers.

Finance Ministry tax director general Fuad Rahmany said earlier this year that the number of taxpayers had increased to 24.8 million from 15.9 million between 2009 and 2012.

Indonesia, whose population is around 240 million, however, has scored among the lowest in tax ratio within Southeast Asia.

It is estimated that the country'€™s tax ratio hit only 11.77 percent last year, far below its neighbors Malaysia (15.31 percent), Thailand (17.07 percent) and Vietnam (24.26 percent).


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