Pushing for a Fair Tax System in Asean, Experts Give This Input

JAKARTA, DDTCNews – Indonesia needs to maximize its role in ASEAN strength in 2023, especially on the economic path. One of the three strategic pillars that is carried out by Indonesia is to complete economic recovery in the area. The aspect of taxation is one of the main menus contained in it.

Deputy Director The PRAKARSA Victoria Fanggidae revealed that there is an interesting topic that deserves to be echoed by Indonesia in the midst of regional countries' efforts to recover their economies. The topic he was referring to was the imposition of a wealth tax or wealth tax by Asian countries.

“The issue of wealth tax has indeed arisen because of the pandemic. However, even though the country's economy is starting to recover, there is nothing wrong with this policy being continuously studied as an alternative in creating a fair tax system," said Victoria in the discussion of the 2023 ASEAN Seminar and Workshop: Transparency and Fair Taxation in Asean, Tuesday (14/3/2023).

Social interest in tax justice, according to Victoria, is the main basis for the government in implementing a wealth tax or wealth tax later. Especially now that the wealth gap continues to widen.

Concept wealth tax  what Victoria is proposing is the collection of a wealth tax on net worth or net worth, And the wealth of appreciation or appreciation of wealth resulting from capital gains (capital gains).

The collection system uses thresholds and rates that vary in each country, can be done with one withdrawal (one off) or recurring collection (recurring). Meanwhile the subject of wealth tax, according to Victoria, is high net worth individual (HNWI) with a net worth of over US$1 million or Rp.140 billion.

"The purpose of wealth tax this, reducing the concentration of wealth in a handful of individuals so as to maintain democracy. Then, add state revenue to recovery, certificates encourage economic independence,” said Victoria.

Policy ideas about wealth tax this too, according to Victoria, had already been offered to members of parliament. Based on a survey conducted by The PRAKARSA, as many as 48% of survey participants (members of Commission XI DPR RI) agreed to the imposition of a wealth tax of over IDR 140 billion. The imposition scheme uses progressive rates with collection every 5 years.

Based on research conducted by The PRAKARSA, the imposition of a progressive rate of 1% -2% on HNWIs with wealth above IDR 140 billion can generate additional tax revenues worth IDR 78,5 trillion. This figure outperforms tax revenues originating from Article 26 Income Tax or Article 22 Import Income Tax (receipts as of December 2021).

However, the imposition wealth tax not without problems. Victoria revealed that one of the homework carried out by Asean countries is coordination between countries which has not been optimal in relation to tax policies. Apart from that, the tax system which is too diverse between ASEAN countries is also an obstacle.

These obstacles, he said, need to be discussed in depth at the 2023 Asean Summit under Indonesia's leadership.

Meanwhile, Head of LPEM FEB UI Riatu M Qibthiyyah added that the realization of a fair tax system in Asean faces a number of challenges. One of them is the ratio of taxes to gross domestic product (GDP) which is still low in most Asean countries.

On the other hand. He added, the challenges to fulfilling the post-Covid-19 SDGs are actually getting bigger.

“Several countries made policy changes during the pandemic. This will help improve tax policy in Asean, including in this case the management of fiscal incentive policies and tax administration," said Riatu.

According to him, improving tax administration is the key for countries in Asean to build a fair tax system. The intended administrative improvement, according to him, includes streamlining global cooperation to suppress tax evasion and tax avoidance.

The imposition of wealth tax, according to Riatu, is still possible. However, he reminded that the implementation of the new tax policy is not easy for every country, especially in Indonesia.

"The important thing is to strengthen connectivity and coordination, not harmonization. Actually harmonization has been carried out in Asean regarding tariffs on parts trade. But if taxes are more in the context of fiscal incentives, so that there is no excessive competition," said Riatu.

On the other hand, Transparency International Indonesia researcher Ferdian Yazid highlighted the importance of the seriousness of each jurisdiction in Asean to reduce the space for corrupt practices and illicit financial flows (illicit financial flow/IFF). According to Ferdian, corrupt practices and IFF undermine a healthy tax system in every country.

Several factors supporting the occurrence of IFF, according to Ferdian's notes, include the lack of transparency of beneficial owners, the presence of anonymous shell companies, the role of professional enablers (professionals who helped the practice of IFF), and low tax rates in Asean.

"We see a clear wedge in fighting corruption, tax evasion and money laundering," Ferdian said.

According to Ferdian, there are several points that need to be implemented by every country in Asean to build a fair tax system. First, there is clear transparency regarding the ownership of assets or assets (beneficial ownership).

Second, stricter anti-money laundering policies. Third, expansion public country-by-country reporting (CbCR). Fourth, expanding the exchange of tax information between countries (AEOI). Fifth, optimization stolen asset recovery. Sixth, tightening regulations on professions that have the opportunity to facilitate IFF practice. "For example, strengthening the code of ethics for lawyer, accountant or tax consultant. So the role of professional organizations is bigger to prevent corrupt practices, money laundering or tax evasion," said Ferdian. (sap)

Sumber: news.ddtc.co.id

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