Utang Rp8.500 T Bisa Dilunasi Pakai Uang Pajak, Apa Iya? l Part 3

Summary

This conversation delves into Indonesia's tax history and reform efforts, led by Papung, a former senior official in the Ministry of Finance. Papung shares insights from his early career starting in 1965, highlighting key milestones like the abolition of tax secrecy and the implementation of transparency laws under President Soekarno. The discussion covers strategies to reduce reliance on debt by improving tax collection and compliance, the importance of data-driven tax systems, and the fair taxation of businesses, especially SMEs. Papung emphasizes the need for continued transparency, monitoring, and political will to foster a more prosperous and fair Indonesia.

Takeaways

• 😀 Indonesia's tax system aims to address key issues such as corruption, debt, and improving tax collection through regulatory reforms.
• 😀 The speaker started their career in 1965 as a civil servant at the Ministry of State Iuran (now Ministry of Finance) at the age of 18, becoming a tax employee.
• 😀 Transparency in taxation was first pushed forward by President Soekarno through a decree (Perpu 2/1965) that eliminated secrecy within the Ministry of Finance, marking a significant step toward tax transparency.
• 😀 The system of monitoring and self-assessment in Indonesia's tax system was developed over time, including amendments to key laws, aimed at increasing efficiency and transparency.
• 😀 The speaker highlighted that Indonesia’s tax ratio reached 12.7% under their leadership, though it has since dropped below 10%, partly due to fluctuating commodity prices.
• 😀 There is a strong link between commodity prices and tax revenue. When commodity prices rise, tax revenue increases, and when they fall, so does revenue.
• 😀 The discussion emphasized that, with proper transparency and tax monitoring systems, Indonesia could significantly reduce reliance on foreign debt by improving tax compliance and raising revenues.
• 😀 The speaker noted that countries like Indonesia could learn from international tax practices, particularly around taxing multinational corporations (like Google), which generate income in Indonesia but avoid paying taxes there.
• 😀 The importance of data and a strong monitoring system for fair tax enforcement was emphasized, ensuring that larger taxpayers contribute proportionally more, while smaller ones pay less.
• 😀 The ultimate goal of the tax system reforms is to create a prosperous Indonesia (Indonesia Sejahtera) by improving tax compliance, increasing revenues, and reducing corruption and national debt.

Q & A

What role did Papung play in the Ministry of Finance, and how did his career start?

Papung began his career in the Ministry of Finance at the age of 18, immediately after graduating from high school in 1965. He was accepted into the Tax Accountant Academy and automatically became a civil servant in the tax department, starting with a low rank and salary.

How did the abolition of secrecy within the Ministry of Finance contribute to transparency?

In 1965, President Soekarno issued a regulation that abolished secrecy within the Ministry of Finance, creating a transparent environment. This was seen as a significant step toward greater openness in government, allowing for better monitoring and accountability.

What measures were taken to improve tax collection and monitoring during Papung's leadership?

Under Papung's leadership, efforts were made to ensure tax compliance through measures such as amending laws, creating a monitoring system that integrated data both internally and externally, and implementing a tax amnesty program to improve compliance and increase revenue.

What was the impact of Papung's strategies on the tax ratio in Indonesia?

Papung's strategies led to a significant increase in the tax ratio, reaching 12.7%. This was a notable improvement compared to current levels, which have declined to below 10%, partly due to factors like fluctuating commodity prices.

How did the monitoring system improve tax compliance?

The monitoring system that Papung helped establish allowed for better tracking of tax filings and ensured that reports from taxpayers matched their financial data with banks. This integration helped identify discrepancies and improve overall tax compliance.

What challenges does Indonesia face in reducing national debt, according to the discussion?

One of the challenges in reducing Indonesia's national debt lies in the underperformance of tax collection. The country has relied on borrowing, and despite efforts to increase tax compliance, there remains significant room for improvement in maximizing tax revenue to reduce dependency on debt.

How did Papung view the importance of the self-assessment tax system?

Papung emphasized that the self-assessment system, when properly implemented with strong monitoring, could ensure fairness in tax collection. This system would allow larger entities to pay higher taxes, while smaller businesses would pay proportionally less, ensuring fairness in the tax system.

What is Papung's opinion on the tax rate for SMEs (Small and Medium Enterprises) in Indonesia?

Papung believes that the tax rate for SMEs should remain low, at 0.5%, to support their growth. He argued that with a strong monitoring system in place, this tax rate would be sufficient and that higher taxes would hurt the ability of small businesses to thrive.

What was the government's approach to digital companies (like Google) operating in Indonesia?

Papung suggested that the government could implement similar strategies to other countries in monitoring and taxing multinational companies that generate revenue in Indonesia but avoid paying taxes. He proposed creating applications and systems to ensure these companies contribute their fair share of taxes.

What is the overarching goal Papung aims to achieve through tax reforms and transparent systems?

Papung's ultimate goal is to create a prosperous Indonesia by ensuring that tax reforms, transparency, and effective monitoring lead to higher tax compliance. This would help reduce corruption, lower national debt, and improve social welfare for all citizens.