Government to go after taxpayers to boost income<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
President Susilo Bambang Yudhoyono told the tax office on
\nWednesday to boost tax revenue up to 19 percent of the nation's
\ngross domestic product (GDP) by 2009, from 13.8 percent at the
\nmoment.<\/p>\n
However, Ministry of Finance Director General for Taxation
\nHadi Purnomo, speaking to reporters following a visit by the
\nPresident to the tax office's headquarters, said Susilo had
\nstated that such a move should not come at the expense of
\neconomic growth.<\/p>\n
\"That means we should focus more on enlarging the tax base,
\nrather than on the tariffs.<\/p>\n
\"So, in 2009, it should become 19 percent -- not by raising
\ntax rates, but by widening the tax base,\" Hadi said after the
\nvisit, in which Coordinating Minister for the Economy Aburizal
\nBakrie and Minister of Finance Yusuf Anwar accompanied the
\nPresident.<\/p>\n
Tax revenue, targeted this year to reach Rp 238 trillion (some
\nUS$26 billion), accounts for about 80 percent of the total state
\nincome. The tax revenue target in the 2005 state budget stands at
\nRp 297.51 trillion. Tax has now become a crucial source of
\nrevenue for the state budget in a bid to end dependency on
\nforeign loans and to create a more sustainable fiscal condition.<\/p>\n
Despite the fact that there is only about 2.5 million
\ntaxpayers out of the country's 220 million population, Hadi is
\noptimistic that the office can still meet the high target, which
\nshould require an increase of about a 1 percentage point in tax
\nratio per year.<\/p>\n
Asked about his plans to increase the number of taxpayers,
\nHadi replied that, aside from developing the so-named single
\nidentification number for citizens, his office is also pursuing
\ngreater access to information of financial transactions in banks
\nand other financial institutions to detect potential sources of
\ntaxpayers.<\/p>\n
But, the later is very unlikely to be adopted in the near
\nfuture amid strong objections, particularly from bankers, citing
\nthe importance of the banking confidentiality to maintain
\nconfidence in the banking sector.<\/p>\n
Susilo's remarks that any move to increase tax revenue should
\nnot put at risk the nation's industry and economic growth
\ncorresponds with the banker's objections.<\/p>\n
Analyst Aviliani of the Institute for Development of Economics
\nand Finance (Indef) cited two things, in addition to increasing
\nthe number of taxpayers, that could boost tax revenue.<\/p>\n
First, improving transparency and efficiency of the tax
\noffice, she said, which would in turn cut bureaucratic red-tape.<\/p>\n
\"This would be beneficial in limiting chances for potential
\nlosses,\" she said.<\/p>\n
Citing various studies, the tax office, despite its
\ncontribution to state coffers, has also been used as a cash cow
\nby unscrupulous officials seeking personal gain.<\/p>\n
Second, Aviliani said, by introducing more tax incentives for
\nindustries, especially export-oriented ones.<\/p>\n
While in the short term, the move would hurt tax revenue, but
\nit would be beneficial in the long run, as companies should
\nbenefit from lower production costs and in the end boost their
\nrevenue.<\/p>\n
Larger revenue means another potential source of tax revenue,
\nshe added.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-to-go-after-taxpayers-to-boost-income-1447893297",
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