Page 2 - Working Paper (Fiscal Decentralization and Sub-national Taxes: Specific Case of Indonesia)

Fiscal Decentralization and

Sub-national Taxes:

Specific Case of Indonesia

Adri A. L. Poesoro* 1

This paper mostly conducts literature TABLE OF CONTENTS
review on sub-national taxes in
developing countries with specific case
of Indonesia. Similar to many developing
countries that experience process of fiscal
decentralization, central government in
Indonesia devolves mostly expenditure
1. Introduction ............ 3
task to sub-national governments after
2001.
2. Concept of
Managing Local
This paper focuses on the concept of
Revenues ................. 4
managing local revenues and which taxes
should be assigned to different kinds of
3. Decentralization in
government. Providing literature review
Indonesia ................. 6
of the concept of managing local revenues,
describing process of decentralization in
4. Performance of
Indonesia, and showing the performance
Sub-national
of sub-national tax in Indonesia.
Taxes ....................... 8
At the end of the sections, this paper 5. Concluding
recommend a primary agenda to solve
Remarks and Policy
the mentioned problems to improve
Recommendation .... 11
current tax administration system. This
system is the most important government
instrument to mobilize resources, reduce
disparity in income and wealth in the
country, and as a tool to stabilize the
economy.

*Adri A. L. Poesoro is a Chief Economist, DANNY DARUSSALAM Tax
Center and a Doctoral graduate from Claremont Graduate University,
USA.

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