Jakarta, The PRAKARSA - The PRAKARSA Together with INDEF, the Indonesia Economic Forum (INDEF) held a Policy Dialogue entitled "Asia Pacific Contribution to the International Tax System: Current UN Tax Convention Negotiations and Beyond." It was held at the DoubleTree Hotel in Jakarta on Thursday, September 25, 2025. This event was held as a forum for open discussion on regional tax fairness and to strengthen the role and involvement in international processes, particularly the UN Tax Convention, to achieve a fairer global tax system.
Ah Maftuchan, Executive Director of The PRAKARSA In his opening remarks, he stated, "We have historic momentum through the UN initiative to formulate a Framework Convention on International Tax Cooperation. This represents a significant shift from the dominance of the OECD to a more inclusive multilateral approach. This momentum is relevant not only for Asia-Pacific countries but also for the entire world in building a fairer and more equitable tax system. This dialogue provides an important space for governments and civil society to share experiences, strengthen regional cooperation, and promote transparency for progressive and pro-people tax policies."
The latest research PRAKARSA Regarding the dynamics of tax ratios in Indonesia, Thailand, and Vietnam, various tax reforms have been implemented, focusing on adjustments to Income Tax (PPh), Corporate Income Tax, and Value Added Tax (VAT). However, these efforts have not yet been able to improve tax ratios due to challenges such as high levels of economic informality, inequalities in the effectiveness of tax redistribution, and reliance on a narrow tax base.
To answer this challenge, Bintang Aulia Lutfi, Economist at The PRAKARSA, emphasized the need for inclusive and digital-based tax reform. "ASEAN needs to proportionally expand the tax base, strengthen compliance with technology, review incentives, and develop new instruments such as digital and carbon taxes. These steps are crucial to creating a fair, efficient tax system that supports sustainable development," he said.
Roby Rushandie, Economist at The PRAKARSA, assesses that the UN Tax Convention opens up a significant opportunity to improve global tax governance. He believes this initiative represents an important, transformative breakthrough because it prioritizes the principles of inclusivity and equality. "This convention guarantees civic participation, implements a one-vote-one-country mechanism, and has strong political legitimacy because it emerged from a multilateral process under the UN," explained Roby. Roby hopes this step will be able to address global tax challenges, including preventing tax evasion and illicit financial flows by both corporations and ultra-wealthy individuals.
Mekar Satria Utama, Director of International Taxation at the Directorate General of Taxes, Ministry of Finance of the Republic of Indonesia, who also attended as a speaker at the event, stated that the Indonesian government welcomes and fully supports the UN Tax Convention initiative as a step towards more inclusive and equitable global tax governance. Indonesia emphasized the importance of recognizing source-based taxation rights and digital economic participation within the convention framework, particularly through the application of the concept of significant economic presence to ensure fairness for developing countries.
"Furthermore, Indonesia is promoting a dispute resolution mechanism that takes into account capacity gaps between countries, while still respecting national legal sovereignty in resolving domestic disputes," Mekar said.
Kim Jacinto Henares, member of the Independent Commission for International Tax Reform (ICRICT), also emphasized the importance of the UN Tax Convention as a new milestone for global fiscal justice. He highlighted the need for a global minimum tax, a digital tax regime based on Significant Economic Presence, and a wealth tax for the ultra-wealthy.
"The UN gives us an opportunity to solve common problems. We must go further to protect our country. There's so much revenue to be had, but we must fight for our own well-being," Kim said.
Meanwhile, Imaduddin Abdullah, Director of International Collaboration at INDEF, expressed the importance of civil society collaboration in supporting and ensuring that the UN Tax Convention is aligned with the sustainable development agenda and in the interests of the wider community.
"The UN Tax Convention is an opportunity for developing countries in the Asia-Pacific region to collaborate and implement several proposed targets. The key is collaboration, as political will and implementation are crucial. Global standards are agreed upon by various parties to become a common standard," Imad explained.
Jason Ward, Principal Analyst at the Center for International Corporate Tax Accountability and Research (CICTAR), Australia, also reiterated the previous statements. Jason explained the importance of emphasizing tax fairness in maintaining societal stability.
"Governments at both the national and regional levels need to demonstrate that their tax systems are working. As the world's largest corporations continue to reap astronomical profits with ever-increasing profit margins, and ultra-high-net-worth individuals are able to avoid their obligations through tax havens and trust structures, this can undermine public trust and create social unrest. If we are to have a stable democratic society, the state must be able to raise sufficient revenue to finance the social services, public services, and infrastructure we all need to foster a more equitable future for our nation," Jason said.