Page 9 - Indonesia Taxation Quarterly Report (Q1-2019)

INDONESIA TAXATION QUARTERLY REPORT Q1-2019 Executive Summary

The underlying reason is quite rational For Indonesia, tax reform that considers
given the global economic situation that the efforts to improve competitiveness
is overwhelmed with uncertainty and is a must. The trend of global tax
sluggish Gross Domestic Product (GDP) competition, the need to drive the
growth in many countries. The obsession domestic economy, and the middle-
to increase competitiveness is primarily income trap threat are issues that
aimed at attracting capital and highly- become cautions. The tax system that
skilled workforce that are believed to be supports the investment climate and
the component of domestic productivity. economy as a whole is also believed
to increase revenue for two reasons.
In terms of policies, encouraging First, such a system will increase the
competitiveness can be done through economic base and the ability to pay
various options related to subjects, taxes. Second, the system will improve
objects, and rate. However, one thing taxpayer compliance due to the better
that is often overlooked is that the quality of their relationships and
competitiveness of a country is also communication with the government.
influenced by how the tax system in The national third tax reform from
a country can guarantee certainty. 2017 until 2020 tax reform agenda can
Certainty in the tax system is also certainly be a momentum to thoroughly
influenced by simple, low-cost and clear review these matters in order to
tax administration that guarantees the strengthen the Indonesian economy in
taxpayers’ rights. In addition, certainty the future.
is closely related to the design and
implementation of efforts to prevent and
resolve tax disputes.

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