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The three presidential and vice presidential candidates are yet to focus on efforts to optimize tax revenues as none of them has talked about taxation policies during their campaigns.
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Since the presidential election campaign started on June 2, the presidential and vice presidential candidates have been busy promoting the people's economy without explaining whether they will finance the economy with debts or tax.
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A taxation analyst at Tax Center UI Darussalam viewed the fact that the presidential campaign didn't touch upon taxation issues was sad since tax had been making huge contribution to state revenues.
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"It is ironic that taxation, which represents over 70% of state revenues, has not been a debate issued during the Presidential Election 2009," he told Bisnis yesterday.
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As a result, he continued, the people didn't know the amount of tax they had to bear to finance development programs offered by the candidates. "In addition, how tax will be collected from us? The people don't know a thing about it at the moment."
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Darussalam explained tax in principle was a result of political, economic, and legal process. "This concerns with the amount of tax that the people have to pay and the benefit of tax for the people."
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He added tax could also serve as a yardstick to measure tax compliance of public official candidates. Therefore, the presidential and vice presidential candidates should be willing to inform their yearly tax assessments (SPT) to the public.
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Chairperson of the Indonesian Taxpayers Association (APPI) RM. Hermantho previously suggested the presidential and vice presidential candidates announced their tax obligations publicly to show the public their compliance as citizens.
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"They will set examples for the people. If the leaders are tax compliant, the people will automatically follow."
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APPI even asked the Directorate General of Taxation to thoroughly examine the wealth reports of the presidential and vice presidential candidates to know about their tax compliance.
Imitate the US
Imitate the US
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Darussalam illustrated that the presidential election campaign in the US massively debated about taxation issues. "Obama with his progressive tax discourse plans to lower tax for people earning less than US$250,000 and raise tax for those earning more than US$250,000," he inserted.
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With the policy, he said, Obama believed he would be able to ease the burden of low-income people as around 95% of the US people only earned between US$100,000 and US$250,000 per annum.
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An economist at The Global Nexus Institute Christianto Wibisono viewed nearly all presidential and vice presidential candidates had the same way to bolster tax revenues, namely by extending tax base.
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"If the money flows into the state coffer, how we optimize the efficiency? Then, how we protect the money from being corrupted? Those issues have yet been clear."
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Fadhil Hasan, an economist at the Institute for Development of Economic and Finance and a member of the economic team of presidential and vice presidential candidates Jusuf Kalla-Wiranto, explained the JK-Wiranto couple in principle had already prepared a scenario to bolster tax revenues and increase tax ratio in the next five years.
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First, the couple would extend tax base or increase active new taxpayers. He hoped the tax ratio could be increased from the current 13.4%-13.6% to 18%-20% in 2014.
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"Our tax ratio is low compared to other countries'. We have potential to extend tax base in line with the GDP increase," he explained to Bisnis last week.
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Second, the couple would lower tax tariffs, especially income tax, to provide workers and employers with incentives in a bid to improve tax compliance.
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Third, the couple would improve bureaucratic reform in the directorate general of taxation. "It means that they will continue reform in a systematic and planned way."
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An economist at the Center for Information and Development Studies Umar Juoro argued the current Susilo Bambang Yudhoyono-Jusuf Kalla administration had been trying to improve tax administration system in the past two years. Therefore, one of them would only to continue their program should one of them win the presidential election.
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"The bureaucratic reform has showed improvements and taxpayers have acknowledged that. Therefore, we have to continue the reform. The sooner the better," said Umar imitating the campaign slogans of both SBY and Jusuf Kalla."
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Umar suggested the economic team of the presidential candidates fix a realistic tax ratio increase. He calculated tax ratio achievable in the next five years would reach no more than 16%-17%.
Labels: Economy Update, Tax Update
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