PINTAR - Supporting Indonesia's Move to Get Smart on Tax Reforms
* World Bank Approves $110 Million New Financing to Help Boost Tax Revenues
* Project for Indonesian Tax Administration Reform (PINTAR)
The World Bank is set to support Indonesia in its ongoing effort to improve its tax administration system through the Project for Indonesian Tax Administration Reform (PINTAR). An investment loan worth $110 million has been approved for the project, which aims to increase the efficiency of taxpayer data collection, as well as to strengthen transparency and accountability in tax administration.
The main beneficiary of this project is the Directorate General of Tax under the Ministry of Finance, which launched a major reform effort in 2001. This reform effort is guided by two core objectives, namely to increase the tax yield and promote the investment climate. Progress in meeting the former has been significant: the last four years has seen a sizable increase in the revenues generated from the oil and gas sector, while non-natural resource related revenues have also increased slightly from 10.4 percent of GDP in 2003 to 11.4 percent for 2007. In the medium-term, the Indonesian government aims to increase these revenues to about 13.5-14 percent of GDP by 2009 to help meet additional spending needs in infrastructure and poverty reducing programs.
“Through PINTAR, the World Bank sets out to compliment this effort by helping the Indonesian Government expand tax bases, both in terms of increasing the number tax payers and transactions coming into the tax system, which would in turn help generate more non-oil and gas tax revenue, ” said Joachim von Amsberg, the Country Director for the World Bank in Indonesia.
Another key element of the tax reform effort is the reorganization of tax administration structures. In 2006, the Directorate General of Tax began reorganizing along functional lines to facilitate a smoother exchange of information, comprehensive audits, and in general increase the efficiency and effectiveness of the administration. In addition, a taxpayer segment approach has been introduced at the field office level with the establishment of specialized tax offices for large, medium and small taxpayers.
PINTAR will support these ongoing reforms in both operational and support functions of the tax administration office. The project is made up four main components:
* Increasing the efficiency of taxpayer data collection and management – through activities aimed at improving tax payer registration, returns processing, taxpayer accounts management, documents management, and IT infrastructure.
* Human resource management and development – through activities aimed at improving human resource policies, training capacity and strengthening anti-corruption.
* Compliance management – through activities that strengthen the tax audit and collection functions.
* Project and change management – through activities aimed at strengthening project management and oversight, change management including internal and external communications, quality control, etc.
* Project for Indonesian Tax Administration Reform (PINTAR)
The World Bank is set to support Indonesia in its ongoing effort to improve its tax administration system through the Project for Indonesian Tax Administration Reform (PINTAR). An investment loan worth $110 million has been approved for the project, which aims to increase the efficiency of taxpayer data collection, as well as to strengthen transparency and accountability in tax administration.
The main beneficiary of this project is the Directorate General of Tax under the Ministry of Finance, which launched a major reform effort in 2001. This reform effort is guided by two core objectives, namely to increase the tax yield and promote the investment climate. Progress in meeting the former has been significant: the last four years has seen a sizable increase in the revenues generated from the oil and gas sector, while non-natural resource related revenues have also increased slightly from 10.4 percent of GDP in 2003 to 11.4 percent for 2007. In the medium-term, the Indonesian government aims to increase these revenues to about 13.5-14 percent of GDP by 2009 to help meet additional spending needs in infrastructure and poverty reducing programs.
“Through PINTAR, the World Bank sets out to compliment this effort by helping the Indonesian Government expand tax bases, both in terms of increasing the number tax payers and transactions coming into the tax system, which would in turn help generate more non-oil and gas tax revenue, ” said Joachim von Amsberg, the Country Director for the World Bank in Indonesia.
Another key element of the tax reform effort is the reorganization of tax administration structures. In 2006, the Directorate General of Tax began reorganizing along functional lines to facilitate a smoother exchange of information, comprehensive audits, and in general increase the efficiency and effectiveness of the administration. In addition, a taxpayer segment approach has been introduced at the field office level with the establishment of specialized tax offices for large, medium and small taxpayers.
PINTAR will support these ongoing reforms in both operational and support functions of the tax administration office. The project is made up four main components:
* Increasing the efficiency of taxpayer data collection and management – through activities aimed at improving tax payer registration, returns processing, taxpayer accounts management, documents management, and IT infrastructure.
* Human resource management and development – through activities aimed at improving human resource policies, training capacity and strengthening anti-corruption.
* Compliance management – through activities that strengthen the tax audit and collection functions.
* Project and change management – through activities aimed at strengthening project management and oversight, change management including internal and external communications, quality control, etc.