Webinar Indonesia Development Talk LPEM FEB UI,
Modernization of Local Tax Administration
Rifdah Khalisha – Public Relations FEB UI
DEPOK – (5/10/2021) On Tuesday and online, the Institute for Societal Economic Research (LPEM) FEB UI in collaboration with the Asian Development Bank held the Webinar, Indonesia Development Talk, titled “Modernization of Regional Tax Administration: Lessons Learned from Local Government Experiences”).
Director of Transfer Capacity and Implementation, Directorate General of Fiscal Balance at the Ministry of Finance (DJPK), Bhimantara Widyajala said that the central government and local governments must play a role in optimizing local tax collection. The government needs to improve regional policies, including the significance of the types of regional taxes and the synchronization of related laws and regulations. From the local government side, it is necessary to strengthen the administration and supervision of tax collection, to provide better services to local taxpayers.
Deputy Head of Education and Training, LPEM FEB UI, Khoirunurrofik discussed the role of local taxes for regional development and increasing the tax ratio. He said that, “Data from BPS shows that when the trend of the national tax ratio decreases, the role of local taxes will actually increase in 2020.”
According to Khoirunurrofik, it is necessary to optimize local taxes in fiscal decentralization policies in the theoretical, policy and implementation aspects. In addition, regional expenditures must also be oriented towards regional revenues to achieve fiscal independence.
Key factors in the effort to increase local taxes include a new approach to the process of improving revenue performance; determination of effective spending strategies for sustainable income; circulation of money in the region as long as possible to provide a significant multiplier impact; increasing the role of local governments—not only administrative units, but also regional economic units—that are able to innovate and adapt to digitalization; expansion of inter-regional economic cooperation to create economies of scale; and regional economic development aimed at increasing APBD and GRDP with quality (inclusive) economic growth. (hjtp)
Furthermore, the Head of the DKI Jakarta Provincial Government’s Communications and Information Technology Office, Atika Nur Rahmania, spoke about the digitization of public services. “The challenges of the COVID-19 pandemic have greatly changed the way we interact and transact. Indeed, we must take advantage of this crisis momentum to accelerate digital transformation. The main objects are digital government, digital economy and digital society. The government plays a role in initiating all internal changes so that they have an impact on the economic and digital aspects.”
The DKI Jakarta Provincial Government has begun to utilize an electronic system for the development of digital transformation of local taxes, integrating the services of the Regional Revenue Agency (Bapenda) into the Jakarta Kini (JAKI) application through the JakPenda feature. In this application, the public can check and calculate taxes, namely Land and Building Tax (PBB), Motor Vehicle Tax (PKB), and Regional Tax.
Regional Secretary of Badung Bali Regency, I Wayan Adi Arnawa said, “From Law no. 28 of 2009 concerning Regional Taxes and Levies, Badung Regency utilizes it according to the potential that exists in 10 types of taxes. Currently, we are still relying on the tourism sector, one of which is hotel tax, restaurant tax, entertainment tax, including parking tax.”
“Therefore, the challenge going forward is, we will optimize the income from increasing regional taxes by implementing steps, both intensification and extensification, in tax administration.” he continued.
In modernizing tax administration, the Badung Regency Government has built a monitoring system to make it easier and faster for taxpayers to pay taxes through online technology (self-assessment). In addition, this system is connected to several banks and is monitored by the Licensing Service.
The Head of the Asian Development Bank TRAMPIL Team, Paul Tambunan, explained the collaboration between the Ministry of Finance, the Asian Development Bank, and the Swiss Confederation in designing the Tax Revenue Administration Modernization and Policy Improvement in Local Governments (TRAMPIL) TA-8877-INO to support strengthening the administration of tax revenues, both to the central and regional governments. Not only that, TRAMPIL also provides knowledge for several local governments who want to maximize their potential in increasing local tax revenues.
He explained, “TRAMPIL’s main activities are mobilizing local revenues and the tax base, transforming local revenue management institutions, and developing and implementing information technology systems. Then, related to optimizing regional revenue, it actually comes from mandatory compliance and voluntary compliance.”
Finally, Senior Project Officer of the Asian Development Bank, Deeny Simanjuntak, said, “The success factor in implementing the TRAMPIL project is a leadership that is able to direct the modernization of regional revenue administration to the right destination.”
Currently, local revenue mobilization is very important for economic recovery. Therefore, the central government should provide incentives to local governments to reform the mobilization. Governments can also close compliance gaps, increase revenue collection, and streamline tax payment services using technology solutions.
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