Analyst Lauds Next Government's Plan to Form Special Taxation Body

The Center for Indonesia Taxation Analysis (CITA) has praised the next government's plan to create a ministerial-level body to manage taxes.

"In the midst of various binds, the plan to form a ministerial-level body seconded to the President to manage taxes is a good idea and worth appreciating," CITA analyst Yustinus Prastowo said here on Saturday.

He added that the creation of the special body was crucial, in view of the tax receipt target set in the draft 2015 state budget.

The next government would shoulder the burden of narrowing fiscal room since the imminent economic slowdown would reduce the tax growth to below 10 percent, he said.

To that end, he said the Joko Widodo-Jusuf Kalla government should reform the taxation system, set priority scales and achieve performance in a well-planned, guided and measurable way.

The taxation policy in the next five years should place an emphasis on law enforcement, protection of taxpayers' rights, good services, and re-distribution of income by providing infrastructures and improved basic services, he said.

During the 10 years of President Susilo Bambang Yudhoyono's government, Yustinus said the tax ratio - the ratio of tax receipts to gross domestic product (GDP) - only rose 0.2 percent to 12.3 percent, compared with 2004.

The figure was below the average tax ratio of lower-middle income countries, which reached 17.7 percent. Meanwhile, the standard tax ratio to achieve millennium development goals (MDGs) is 25 percent, he said. (antara)

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