Jakarta, The PRAKARSA – research and policy advocacy institutions – become respondents in the launch of study results “Gender and Economic Inequality in Budget Politics: A Study from the Perspective of Taxation and Dark Money Flows” organized by Aksi! on Thursday (7/11/2024) in Kalibata, South Jakarta. This event is an important momentum to discuss the impact of fiscal and taxation policies on economic and gender inequality.
The results of the study presented by Marhaini Nasution and Rio Ismail from Aksi! revealed that tax policies in Indonesia still contribute to gender and economic inequality. They highlighted potential tax losses of up to USD 4,86 billion per year due to tax avoidance by large corporations, which reduces the budget for funding social programs for women and marginalized groups.
"The gender injustice that occurs cannot be separated from the fiscal policy structure that still favors large corporations, while women's groups, especially in the informal sector, continue to be victims of non-inclusive policies." said Marhaini Nasution.
Rio Ismail added that the flow of dark money (illicit financial flows) exacerbates inequality by reducing the budget that should be used to support health, education and social protection programs.
Samira Hanim, Researcher at The PRAKARSA emphasizes that the tax taxonomy shows gender inequality in the tax system in Indonesia. The tax taxonomy in Indonesia consists of income tax, sales tax, and ownership tax. The imposition of Non-Taxable Income (PTKP) applies to men but not to women who work, the policy of increasing VAT to 12%, and asset ownership that is still dominated by men. This is because men are considered to be the head of the household, which ultimately causes gender inequality in the tax system in Indonesia.
Samira added that in other developing countries, the government has handled this problem, such as in Singapore, where pregnant and giving birth women are exempted from double the PTKP, in India and Africa a policy has been implemented to exempt VAT for sanitary napkins and baby diapers, and in Nepal a law has been implemented that regulates tax exemptions to support property ownership for women.
Samira also added that a holistic approach to the problem of gender inequality is something that needs to be highlighted, especially strategies for increasing women's capacity in the formal economy, strengthening supporting infrastructure for women, and education and socialization of taxation issues to women.
Other respondents, such as Transparency International Indonesia (TII), Publish What You Pay Indonesia (PWYP), and the Center of Economic and Law Studies (CELIOS) highlighted the need for stricter law enforcement against tax avoiders and the importance of ensuring that fiscal benefits are felt by marginalized groups. In line with recommendations from the study results including the importance of increasing budget allocations for women's empowerment and the formulation of more inclusive tax policies.
This event is an important achievement of the collaboration of the Indonesian Tax Fairness Forum (FPB), where Aksi! acts as the study implementer and other members, including The PRAKARSA and CSOs who attended as part of FPB are committed to continuing to collaborate to enrich public discourse on fair taxation. The discussion also involved various other important elements such as women's organizations, indigenous peoples, and youth. All parties agreed that fair fiscal reform is urgent to address gender and economic inequality in Indonesia.
This event is an important momentum for improving fiscal policy, especially for women's welfare. "There is still a lot of room to improve fiscal policy to be more inclusive and equitable," Samira concluded.
