Jakarta, The PRAKARSA – Wealth tax can be an alternative to mobilize funding sources for more varied development. Wealth tax can also be an instrument to increase contributions from the super-rich, especially in times of crisis.
The research and policy advocacy institute PRAKARSA became one of the speakers in the Focus Group Discussion (FGD) entitled "Regional Connectivity: Generation Z, the Driving Force of Advanced Indonesia" organized by the Deputy Chairman of the People's Consultative Assembly of the Republic of Indonesia (MPR RI) Edhie Baskoro Yudhoyono. Held at the Sultan Hotel, Jakarta, on Thursday (12/12/2024).
The Executive Director PRAKARSA, Ah Maftuchan, on this occasion conveyed that Indonesia's fiscal system is currently experiencing major challenges. He highlighted the budget deficit limit set at 3% of GDP, which he said needs to be reviewed to provide flexibility in mobilizing development funding sources.
"My view is that 3,5% to 4% is still possible. Then with that, the government will be able to mobilize more varied sources of development funding," Maftuchan said.
Furthermore, he also emphasized the importance of the Indonesian government adopting wealth tax as an instrument of choice to increase contributions from the super-rich, especially in crisis situations.
“We propose that we need toexercise wealth tax. We have had discussions with the Ministry of Finance two years ago, but the Ministry of Finance has always stated that this is technically visible but politically rather difficult, so please communicate with parliament, with the DPR so that it can later become one of the options," explained Maftuchan.
On this occasion, Maftuchan also underlined the importance of equitable infrastructure development to improve connectivity between regions. He proposed that infrastructure development not only focus on toll roads and airports, but also on providing environmentally friendly public transportation.
He said that infrastructure must be able to support the mobility of people and goods, as well as improve public services, especially outside Java. "The quality of health and education services in remote areas needs to be improved to reduce social inequality," Maftuchan said.
In the context of youth empowerment, Maftuchan emphasized the need for better access to job training and education. He proposed that training should not only be available in big cities, but also in the regions, with a focus on skills certification to improve workforce competitiveness.
"Entrepreneurship must also be strengthened by providing access to capital and markets. We believe that downstreaming Indonesia's leading commodities, such as palm oil and cocoa, can provide added value that is directly felt by the community," said Maftuchan.
Maftuchan further highlighted the importance of paying attention to negative externalities that often arise from national development priorities. He reminded that “there are many land cases that have not been resolved, many compensation cases that have not been resolved, and environmental impacts that have been neglected. All of this needs to be a serious concern in every step of development.”
At the end of his presentation, Maftuchan hoped that this forum would be a better communication bridge between parliament and the public. He emphasized the importance of cooperation to build a more just and sustainable Indonesia.
"Hopefully this forum can be a better communication bridge between parliament and society. We need to work together to build a more just and sustainable Indonesia," he concluded.