TERC LPEM FEB UI Collaborates with OnlinePajak:
”Post-pandemic Regional Tax in Indonesia”
Nino Eka Putra ~ FEB UI Public Relations Officer
DEPOK – The Tax Education and Research Center at the Economic and Community Research Institute, Faculty of Economics and Business, Universitas Indonesia (TERC-LPEM FEB UI), collaborated with OnlinePajak to hold a webinar entitled ”Post-pandemic Regional Tax in Indonesia”, Wednesday (1/7/2020).
Speakers at the webinar were Deni Hendana, Head of the Bogor City Revenue Office, Riatu M. Qibthiyyah, Ph.D., Head of LPEM FEB UI, Khoirunurrofik, Ph.D., Deputy Head of the Research and Development Center, LPEM FEB UI, Dr. Hendriwan, M.H., M.Si., Director of Regional Capacity, Directorate General of Regional Financial Development at the Ministry of Home Affairs. The webinar was moderated by Christine Tjen, S.E., Ak., M.Int.Tax, CA., Coordinator of TERC-LPEM FEB UI.
Dr. Beta Yulianita Gitaharie, Acting Dean of FEB UI, welcomed the webinar and expected future collaboration between TERC-LPEM FEB UI and OnlinePajak to provide tax education for the public that benefits all.
Dewi Mulia Karnadi, CEO of Indonesia OnlinePajak, said in her keynote speech that OnlinePajak provides a technology platform with integrity that can make it easier for business players/businesses/industry players to take advantage of the tax breaks provided by the central and local governments and other initiatives.
Deni Hendana, the first speaker, said the Bogor City Administration’s strategy to secure local tax revenues during the Covid-19 pandemic is to strengthen fiscal policy coordination between the central and regional governments in the context of decentralization, tax relief in the form of relaxation of tax payments, tax incentives in the form of reducing and eliminating fines. All are aimed at providing stimulus and incentives for the public and maintaining the sustainability of the regional treasury.
“Bogor city’s regional tax/fiscal policy in the second semester, from March to June 2020, included tax relief through an extension of tax filing due date, tax incentives in the form of elimination of fines aimed at providing stimulus and incentives for the public and maintaining the sustainability of the city’s treasury. Meanwhile, economic policies for economic clusters that are adjusted to new habits will be introduced in compliance with health protocols, refocusing budget allocation for unexpected expenditures (BTT) to support economic recovery efforts by the economic unit of the Covid-19 Task Force,” said Deni.
Riatu M. Qibthiyyah, the second speaker, explained that the fiscal and regional tax conditions show that most local taxes are buoyant and sensitive (pro-cyclical) to the business cycle. The decrease in own-source revenue, particularly from local taxes as a percentage, is likely to be greater at the district and city levels than at the provincial level. The risk of shortfall is greater for local governments whose tax revenues are relatively dominant.
Most of the tax revenues are concentrated in a few regions. The type of local tax that experiences a high risk of reduction is consumption tax compared to wealth-based tax. Indonesia has relaxed local tax policies in several regions, including by allowing tax payments via ATMs and online platforms since 2015, information (website) on regional tax policies, e-filing for several local taxes, and electronic transaction tracking (cash register) since 2011.
“In this period of economic recovery, the strengthening of administration capacity and improving regional tax policies should be put to good use. The tax relief provided by the local government is not just limited to tax amnesty but also a temporary tax exemption (reduction). For most regions in Indonesia, the electronic tax administration system is still limited to the payment system, so it needs to be improved,” said Riatu.
Khoirunurrofik, the third speaker, said that Covid-19 has affected regional economic and fiscal conditions due to government policies to overcome/reduce the spread of the virus through travel restrictions, social distancing, stay-at-home order, and the closing of businesses/restricted business hours. In addition, there have also been changes in people’s behavior and disruption in the consumption of non-essential goods and services, such as changes in employment status, flexibility in working hours, changes in and limited supply, caution against and avoidance of the risk of infection.
“Local governments must transform themselves so that they function not only as government administration units but also as regional economic units that innovate and respond to changes through digitalization. Regional government heads must have a vision and an entrepreneurial spirit and be able to create a sustainable system. In addition, they should make local economies ‘feasible’ for transformation into Special Economic Zones (SEZ) so as to function as hubs of local economic growth. Intra-regional economic cooperation with provinces playing an important role in creating economies of scale is also crucial. The Regional Revenue and Expenditure Budget (APBD) is no longer the ultimate goal of regional economic development; instead, the goal is to increase the Gross Regional Domestic Product (PDRB) through quality economic growth,” said Khoirunurrofik.
Hendriwan, the fourth speaker, said that the general measures to prepare the Electronic Trading Platform (ETP) stipulated in a Home Affairs Ministerial Regulation (Permendagri) concerning the 2021 APBD Guidelines include collecting data and information on the development of regional government revenue and expenditure, analyzing and identifying problems, formulating a roadmap for the stages of the implementation of ETP as outlined in regulations/decrees of regional government heads, formulating business models, creating access to telecommunications and information through cooperation with the Ministry of Communication and Informatics (Kominfo), organizing national electronic-based government system infrastructure, providing customer services to handle customer complaints, building awareness and understanding of the public and local government officials, monitoring and evaluation of the implementation of ETP, and supervision of regional income and expenditure.
Optimizing local revenue (PAD) in the new normal can be conducted through counseling and outreach to all taxpayers and retribution payers regarding tax obligations and retribution payment services, data recollection and testing of taxpayers’ potentials as well as increased intensification of local taxes and levies, the implementation of rewards and punishments for taxpayers and retribution payers as well as the collection of local tax receivables. Matters that support optimization include cooperation and innovation, expansion of payment channels, digitalization of tax, service facilities and human resources management.
“Therefore, the central and provincial governments and district/city governments need to coordinate PAD management with regard its legal basis, real-time data reporting, local government policies related to the management of regional taxes and levies, revenue generating activities, the management of regional government expenditures, and local government innovations to optimize PAD,” Hendriwan concluded. (hjtp)
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