Illicit Financial Flows in the Fisheries and Coal Mining Sector and Their Derivative Products in Indonesia

Commitment to combat illicit financial flows or illicit financial flows has become a global commitment mandated in the target of the Sustainable Development Goals (SDGs). Illicit financial practices occur in various modes such as money laundering, transnational bribery, or tax evasion and evasion.

This report presents an analysis of illicit financial flows in two primary natural resource (SDA) export commodities in Indonesia, namely fisheries and coal. The analysis focuses on estimating the amount of illicit financial flows and the potential loss of state revenue due to the practice of illicit financial flows. In these two commodities, PRAKARSA analyze the sub-sector as a whole including highlighting the potential for loss of state revenue from taxes and royalties.

From the results of this study, the state has lost revenue for 10 years worth US$5,58 billion or 74 trillion rupiah, equivalent to 3,7 percent of state revenues in 2021.

The results of this study are expected to contribute and be useful in designing strategies to tackle tax avoidance practices and tax leakage in Indonesia, especially in the fisheries and coal mining sectors.

Check out the full report here, happy reading!

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