JAKARTA – Minister of Finance (Minister of Finance) Sri Mulyani Indrawati stated that the government continues to strive to maintain the momentum of economic growth and investment in Indonesia, by providing tax incentives for the business world. These incentives are in the form of tax deductions in the form of tax holidays or tax allowances.
However, she said, giving these incentives made the government have to be willing to lose the potential of tax revenue. In 2017 alone, the government was willing to lose tax revenues of around Rp.154.66 trillion. The total tax of Rp154.66 trillion which is not bagged by the country is categorized as tax expenditure.
Total government tax expenditure in 2017 reached Rp154.66 trillion derived from value added tax (PPN) and sales tax on luxury goods (PPnBM) of Rp125.32 trillion, income tax (PPh) of Rp20.17 trillion and import duties and excise duty of Rp9 15 trillion.
“So all of these tax facilities are actually facilities that we call tax expenditure. So the government is actually entitled to tax, but we don’t collect it, because we want to provide this facility to boost the economy,” Sri Mulyani explained at the Ministry of Finance Building, Jakarta, Thursday (18 / 10/2018).
The woman who is familiarly called Ani explained, the various facilities are the types of facilities enjoyed by the business world. This is done in order to maintain the transparency and accountability of the government.
“In order to be transparent, who actually gets the business world, where do they get, how much do we need to make tax expenditure reports. This is the first time in the history of the Indonesian economy and the Ministry of Finance. Indonesia has issued a number of tax facilities, “he added.
According to him, a number of developed countries have also done this. For example, Canada’s tax expenditure, which includes corporate and personal income tax, Australia and the United States, covers the scope of its tax expenditures for central taxes, while Japan covers the individual income tax and business entities.
“So the definition of tax expenditure is tax revenue that is not collected or reduced as a result of special provisions that are different from the general taxation system (benchmark tax system) which targets only a part of the subject and tax object with certain requirements. For emerging, we are included because not many emerging countries have done this yet, “he said.
Source : SindoNews.com