Today, we see more enthusiasm for tax reform in Indonesia. Although opposed by some civil society groups, President Joko “Jokowi” Widodo’s administration continues to push its fiscal framework reform — which includes a tax amnesty and more incentives for taxpayers.
Last year, the Finance Ministry issued a new tax holiday regulation, expanding the scope and duration of tax holidays for eligible companies.
More recently, a minister suggested Indonesia set up a tax haven on one of its islands. Further, there is also plan to cut corporate tax from 25 to 17 percent.
The goal of these policies is clear, to compete with other tax jurisdictions and create a larger base of taxpayers for state revenue.
The government expects to bring back home and make taxpayers more comfortable in putting their money in Indonesia.
But, the critical question is whether the government’s tax reform policies are in line with the global human