Gov’t to Narrow Down Tax Gap Through Tax Reform

By : Nata Kesuma | Wednesday, June 30 2021 - 13:15 IWST

Minister of Finance Sri Mulyani Indrawati (Photo by: Documentation from PR of Cabinet Secretariat)
Minister of Finance Sri Mulyani Indrawati (Photo by: Documentation from PR of Cabinet Secretariat)

INDUSTRY.co.id - In a bid to restore Indonesia’s tax gap to the normal level, the Government has deemed it necessary to carry out tax reform to bring the gap closer to the international benchmark.

According to Minister of Finance Sri Mulyani Indrawati, the international tax gap benchmark stands at 3.6 percent, especially for countries that join the Organization for Economic Cooperation and Development (OECD) as well as developing countries, while Indonesia’s tax gap is currently at 8.5 percent.

“In Indonesia, the country’s ability to collect 9.76 percent taxes with the tax gap of 8.5 percent has doubled the 3.6 percent among peer nations. We have to reduce the gap close to 5 percent of Gross Domestic Product,” the Minister said during a working meeting with the House Commission XI of the House of Representatives (DPR), Monday (28/6).

The Minister went on to say that the tax reform consists of policy and administration reforms so the Government must take into account the tax base and competitiveness in the economy or among countries, the provision of measurable, efficient, and adaptive incentives, as well as reducing distortion and exemption, and improving tax progressivity.

In terms of administration reform, she added, the Government also needs to create simple, easy, and efficient administration procedures, provide legal certainty, make the most of data and information to make justices, and follow global trends and best practices.

For the record, the concept of tax reform will be further discussed with the DPR and the Government will also consider inputs from all stakeholders.

“We’d like to put all of these things as the foundation of tax reform before the members of the House’s Commission XI. We will discuss how Indonesia’s economic foundation can bring the country closer to the practices applied globally, while still protecting the interests of the nation and the state, as well as our economy and the weak or vulnerable groups,” she remarked. 

News Comment

Today's Industry

Gradiant Logo

Jumat, 24 Maret 2023 - 07:10 WIB

Gradiant Acquires MPES, a leading Water and Wastewater Operations & Maintenance Provider in Oman

Gradiant, a global solutions provider for advanced water and wastewater treatment, today announced it has acquired Muscat Projects & Engineering Services (MPES), a leading full-service water…

The Western Union Company

Kamis, 23 Maret 2023 - 19:28 WIB

Index Launch: Remittances Play a Powerful Role in Consumers’ Financial Planning

As global populations navigate macroeconomic headwinds, consumers expect remittances to play an even stronger role in their current and future financial planning.

Saudi Arabian Airlines (SAUDIA)

Kamis, 23 Maret 2023 - 14:52 WIB

SAUDIA Group Announces International Expansion With 25 New Destinations in 2023, Connecting the World to Saudi Arabia

Saudi Arabian Airlines (SAUDIA) and flyadeal set course to add 25 new destinations in 2023 on SAUDIA Group Network.

Asahi Kasei , Dusseldorf, Germany

Kamis, 23 Maret 2023 - 08:45 WIB

Crystal IS and Asahi Kasei Announce New Record for Single-Chip Device Output and Immediate Engineering Sample Availability of Their Upcoming 160 mW UVC LED

Asahi Kasei, a diversified Japanese multinational company, and subsidiary Crystal IS have demonstrated their next- generation Klaran single chip UVC LED which emits at 160 mW in the ideal germicidal…

PT Alkindo Naratama Tbk (“ALDO”)

Kamis, 23 Maret 2023 - 06:36 WIB

Earning Profits While Protecting the Environment, ALDO Processes Around 80 million kg of Used Paper Every Year

PT Alkindo Naratama Tbk (ALDO), continue to actively earn profits while at the same time participating in preserving the environment through the waste paper processing business.