One of the most important instruments of the ministry of finance in managing state finances is the State Revenue and Expenditure Budget (APBN) or known as fiscal policy which includes the tax system in Indonesia.
Then, who has to pay taxes? All Indonesian people who have economic capacity are classified as taxpayers. The occurrence of the global financial crisis and the disclosure of tax avoidance data in the Panama Papers encouraged international cooperation through the Automatic Exchange of Information (AEOI) or information sharing for taxation.
AEOI (Automatic Exchange of Information) is the automatic and continuous delivery of certain information regarding tax obligations at a certain time from the country of origin or the place of deposit of wealth to the country of the taxpayer.
This policy allows the government to recover lost taxes and non-compliant taxpayers, as well as strengthen international efforts to increase the transparency of cooperation between financial institutions and tax administrations.
The weakening of the global economy has caused a decline in the value of international trade which has an impact on the slowdown of Indonesia’s economic growth. Looking at the current global economic conditions, the only room we can hope for is fiscal or tax.
However, if we look at the results of tax revenues in 2016, even with the tax amnesty, our taxes only increased by 4%, even though the nominal economic growth was around 8%. This means, in the midst of a situation like this, tax revenue is still difficult to expect. This means that the space for fiscal invasion in the following year is also limited.
In fact, PP Number 36 of 2017 has stipulated that in the event that a Taxpayer has assets that have not been reported in the SPT, then he does not take advantage of the tax amnesty within the specified period, there will be consequences.
big homework
TAX REVENUE is currently a big additional job for the government. This is because tax revenues from January to the end of August 2017 only reached Rp685.5 trillion or 53.5% of the tax target in the 2017 Revised State Budget which reached Rp1283.6 trillion.
The remainder of the 2017 tax amnesty program that ended in March was unable to increase tax payments. At the end of this program, the tax amnesty participants actually experienced a decline, the low tax revenue this year had a major impact on state finances, considering that around 74% of state revenue recipients came from tax payments.
A number of steps have been taken by the government, including issuing PP No. 36 of 2017 which contains final Income Tax (PPh) on assets that have not been or are not reported in the Annual Tax Return or Annual Tax Return (SPT).
However, the government’s steps to intensify tax requests are feared to have a negative impact on the economy. Whereas currently a number of countries are cutting their tax rates, for example the United States which will reduce corporate and personal PP. Even neighboring countries such as the Philippines and Malaysia will also lower their tax rates.
New plan
The KUP Law (General Provisions and Tax Procedures) is the main protocol in the form of a system that will regulate how we regulate the tax regime. Talking about tax amnesty, one thing that is interesting is in terms of the ransom money which reached a quite fantastic figure of Rp. 107 trillion. Not only that, from the total tax revenue, the figure did not increase much.
Here there is a contradiction between taxpayers and tax recipients, as a result a new view emerges where if people participate in the tax amnesty they must pay 2%, while if they do not pay 25%. the tax amnesty has not been able to increase tax revenues which only grew by around 4%.
In this case, the aspect of trust must be built, so that reforms start not only from collecting revenues that require people to pay, but also to give trust to taxpayers if the money they pay is used properly. One of them is by forming a tax reform team that aims not only for revenue collection but also how to build trust from taxpayers.
Indonesia is building a tax system that is just and has the force of law. Therefore, we should support the Directorate General of Taxes in carrying out compliant risk management. In this system, taxpayers are included in the tax classification and mapped, if everything has worked with a good and impersonal system, it is hoped that it will be easier.
Increase in tax ratio within 3-4 years