Indonesia tax amnesty: tax ratio increase maintains economic growth

Jakarta, InfoPublik - Currently, Indonesia’s tax ratio is below 11 percent. It is relatively low compared to the countries that have similar economic posture.

“Indonesia’s tax ratio is relatively low. We cannot be included in the same rank with other countries which have similar economy. Our tax ratio is still below 11 percent--10.9 percent to be precise,” said Finance Minister Sri Mulyani Indrawati in a written statement in Jakarta, Monday (8/8).

She added Indonesia’s rapid economic growth is not balanced by tax revenue.

“The economy is booming, but the tax revenue is stagnant. Thus, the ratio is decreasing,” she said. “This year, government’s tax amnesty aims to raise tax revenue and to maintain economic growth momentum. The goal is that we can increase tax revenue and avoid economic contraction.”

To succeed the tax amnesty, she continued, a reform is needed within Directorate General of Taxation’s (DGT) organization. The reform objective is to build a culture of paying taxes which is followed by taxpayers obedience.

“At the same time, it reforms the DGT into a respected and trusted institution. It is a long process that must be sought for continuously,” she concluded. (Translator: Filmon Warouw)