The 14th Asia Pacific Tax Forum (APTF) was held on Wednesday, 3 - 4 May 2023. INDEF Program Director Esther Sri Astuti deliver opening remarks and emphasized the significance of effective international cooperation to achieve fair and equitable tax conditions in all economic activities at the global level by increasing tax revenues, preventing tax evasion, and stopping the leakage of illicit financial flows. Governments in the area must simultaneously strike a balance between revenue objectives and factors that boost economic growth.
Besides, on this occasion Esther Sri Astuti highlighted that the Covid-19 Pandemic changed taxation in three ways. First, taxes play a role in helping fulfill basic needs such as providing direct cash assistance. Taxes reduce economic inequality through progressive taxes. Second, as the world economy recovers, taxation will also play a great role. Despite the fact that there is a lot of help—both in the form of debt relief and direct international financial assistance—an increase in tax capacity is still required to boost state revenue and support growth. Third, transparency will be crucial, particularly the oversight of domestic revenue, aid, and spending on both. For these nations, significant substantial efforts to build tax capacity are at the core of development strategies to achieve Sustainable Development Goals.
Prof. Dr. (HC) KH Ma'ruf Amin, Vice President of the Republic of Indonesia, gave a speech and was formally opened this powerful event. He stated that Indonesia had contributed to post-pandemic regional economic growth. Domestically, the Government has also carried out policy reforms in the economic sector to recover from the pandemic with the enactment of the Job Creation Law, the Law on Central and Regional Financial Relations, the Law on Harmonization of Tax Regulations, and the Law on the Development and Strengthening of the Financial Sector. The Indonesian Government also keeps promoting downstream initiatives and infrastructure growth.
Photo of INDEF documents: (from left to right) Dr. Esther Sri Astuti (Director of Programs at INDEF Institute for Development of Economics and Finance), Daniel Witt (President of the International Tax and Investment Center), Prof. Didik J Rachbini (Founder of the Institute for Development of Economics and Finance), Prof. Dr. (H.C.) K.H. Ma'ruf Amin (Vice President of the Republic of Indonesia) officially inaugurating the 14th Annual Conference of the Asia-Pacific Tax Forum 2023 by striking the gong.
On this occasion, the Vice President of the Republic of Indonesia also discussed the development of Islamic economics and finance in Indonesia. Indonesia has a significant opportunity on a global level in the field of Islamic economics and finance. Currently, the contribution of Islamic economics and finance to the national economy reaches 25%. Additionally, Islamic government bonds have played a significant role in financing national development.
Vice President of the Republic of Indonesia Ma'ruf Amin also emphasized that zakat (Islamic alms-giving) is an instrument for wealth redistribution aimed at reducing inequality and poverty. It serves a similar function to taxation at present. The significant potential for tax collection in Indonesia needs to be aligned with taxes within the framework of economic justice in order to effectively reduce inequality and poverty.
After delivering his speech, Vice President of the Republic of Indonesia Ma'ruf Amin officially inaugurated the annual conference.
Photo of INDEF documents: (from left to right) Prof. Didik J Rachbini (Founder of INDEF), Prof. Dr. (H.C.) K.H. Ma'ruf Amin (Vice President of the Republic of Indonesia), Dr. Esther Sri Astuti (Director of Programs at INDEF), K.H. Ma'ruf Amin (Vice President of the Republic of Indonesia).
The keynote speech was then delivered by Kartika Wirjoatmodjo, the Deputy Minister of State-Owned Enterprises of the Republic of Indonesia, and Suryo Utomo, the Director General of Taxation at the Ministry of Finance of the Republic of Indonesia. Kartika Wirjoatmodjo highlighted the role of state-owned enterprises (SOEs) as value creators and agents of development, emphasizing their contributions to national development. In Indonesia, SOEs have implemented five strategies for reform and transformation to enhance their performance as value creators and agents of development. The contributions of SOEs are divided as follows: 60% in the form of taxes, 29% as non-tax state revenue (PNBP), and 11% in the form of dividends, with a growing trend of tax contributions each year. The largest contributors in terms of taxes among SOEs are Pertamina, Telkom, PLN, Mandiri, BRI, BNI, SIG, Mind ID, Pupuk Indonesia, and Wika. SOEs have also implemented the integration of tax data among themselves.
Meanwhile, Suryo Utomo, the Director General of Taxation at the Ministry of Finance of the Republic of Indonesia, in his keynote speech, discussed the overall improved condition of tax revenues in Indonesia. He also highlighted the government's tax reform efforts through the Harmonization of Tax Regulations Act, which includes provisions for income tax, value-added tax, carbon tax, and excise tax. These policies are aimed at boosting tax revenues in Indonesia. The government also supports industrial growth through offered tax incentives. In the global framework, Indonesia supports the two-pillar solution for digitalization within the inclusive framework of the G20.