The PRAKARSA, a non-governmental organization that focuses on policies related to people's welfare, assesses that the digital revolution should be the main concern of the Ministry of Finance (Ministry of Finance) and the Directorate General of Taxes (DGT).
Bisnis.com, JAKARTA – The tax challenges in the future will be more complex, both internally and externally. Moreover, the current economic condition is experiencing a slowdown due to the pandemic and business changes.
Therefore, the digital revolution must be the main concern of the Ministry of Finance (Kemenkeu) and the Directorate General of Taxes (DGT).
Ah Maftuchan, Executive Director of The PRAKARSA as well as the Coordinator of the Indonesian Justice Tax Forum (FPB), assesses that it must continue to prepare institutions that have good governance and build tax officials with integrity which will be the key to optimizing sources of state revenue, including in the digital economy sector.
“Reforming tax governance and increasing the integrity-capacity of tax officials must be prioritized. In order to strengthen the governance and integrity-capacity of tax officials, the Ministry of Finance needs to involve the participation of community organizations in supervision," said Maftuchan, Thursday (10/3/2021).
Budget and tax policies are important fiscal instruments to finance development, promote prosperity and redistribute resources to reduce poverty and inequality.
The Economist PRAKARSA Panji TN Putra said tax ratio Indonesia in recent years is far from its potential. Some of the causes include the widespread practice of profit-shifting and illicit financial flows by corporations to do tax evasion.
“This is due to weak regulations and weak capacity of tax officials to deal with tax avoidance practices. On the other hand, the extensification of the tax base is still not optimal, for example the taxation of digital business activities and the expansion of excisable goods," added Panji.
Study results PRAKARSA tentang illicit financial flows (2019) for Indonesia's 6 leading export commodities, namely coal, palm oil, copper, rubber, coffee and crustaceans, shows that the potential loss of state revenue is very large.
This shows that the tax authorities are less than optimal in handling tax evasion-avoidance practices.
“During 1989-2017, illicit financial flows entered [over invoice] of the six leading export commodities reached 101,49 billion USD. While the illicit financial flows out[under invoice] reached US$40,58 billion,” said The Economist PRAKARSA Herawati.
Based on illicit financial flows in and out, he revealed that Indonesia's potential loss of tax revenue during that period reached US$11,1 billion.
"The under-reported practice also causes the potential loss of state revenue [royalties] to reach US$2,3 billion for coal commodities and US$569 million for copper commodities during 2000-2017," added Herawati.
Therefore, PRAKARSA – a non-governmental organization that focuses on policies related to public welfare – emphasizes that the tax system in Indonesia should be a tool for distributing economic benefits that can be enjoyed fairly by all citizens without exception.
In addition, a series of cases of tax fraud in the tax authorities should make the government rush to reform the taxation system that is more accountable, transparent, fair and participatory.
Sumber: Bisnis.com
