Worthless Tax Stimulation

VIVAnews - Head of Supreme Audit Agency (BPK) Anwar Nasution views that fiscal stimulation in the form of tax cut that the government allocates in the State Budget is not beneficial. He believes that the fund stimulation will not be proportional because it may be grounds for tax payers avoid paying taxes. 

"We do not recognize whether or not tax manipulation, including export restitution and transfer pricing, is being committed by foreigners and business community," said Nasution on Thursday, Jan 15.

Up until recently, BPK cannot assess data of taxes. "Therefore, we cannot explain why tax revenues ratio against the GDP is still low," he said.

In 2008, tax revenues ratio against the GDP was only 13.7 percent. Nasution was also concerned about the low tax identification number (NPWP) compared to total Indonesian inhabitants. "The registered NPWP reaches 13.1 million. However, those who actively submit income tax application (SPT) are only 3.5 million or 1.5 percent of total population," he said.

BPK claimed that tax amnesty aiming at economic development and employment opportunities may be mistargeted. In addition, the tax assessment ban will prevent BPK from probing into the effectiveness of stimulation fund.

Earlier, Finance Minister Sri Mulyani Indrawati said that the State Budget allocates stimulation fund amounting to Rp 27.5 trillion (US$2.46 billion). Most of the stimulation fund is granted through Ministries/Institutions and Industries in the form of import duty facilities and government-borne value-added tax, revised income tax of article 25, income tax of article 21, export financing, export guarantee and export promotion.

Translated by: Bonardo Maulana Wahono