Celios Welcomes Sri Mulyani's Positive Replacement, Encourages Fiscal Reform

JAKARTA - Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira, positively welcomed the news of Sri Mulyani's replacement from the position of Minister of Finance.

According to him, this step is a breath of fresh air for the national economy, considering that criticism of Sri Mulyani's performance has long been voiced by various think tank organizations and civil society groups.

Bhima assessed that Sri Mulyani failed to encourage fair tax policies, carefully manage state spending, and let debt burdens increase to narrow the fiscal space.

"As an independent research institution, Celios will continue to oversee the policy of the Minister of Finance to replace Sri Mulyani critically and objectively based on data," he said in his statement, Monday, September 8.

Bhima said that his party emphasized five urgent agendas that needed to be carried out immediately in order to restore public trust.

He conveyed that first, ensuring that the tax revenue strategy was carried out by taking into account the purchasing power of the middle and lower class, such as reducing the VAT rate to 8 percent, and increasing PTKP to IDR 7 million per month.

Tax policies must also target the extractive sector through coal production taxes, and windfall profit (profit anomaly) taxes.

"In addition, the wealth tax in the form of 2 percent tax for assets of super-rich people is an urgent thing to do to suppress inequality, while at the same time increasing state revenue," he said.

He conveyed that the second is that budget efficiency must be carried out based on a transparent macroeconomic study, without disturbing public services and basic infrastructure.

In addition, Celios also asked for an evaluation of the Sri Mulyani era efficiency policy which was considered to have a negative impact, such as disruption of regional transfer funds and increasing regional taxes.

Next third, Celios encourages the restructuring of government debt, including efforts to reduce interest expense, to open a debt swap for energy transition option (to change debt obligations with an energy transition program), debt swap for nature (to exchange debt with forest/mangrove/karst conservation), and debt cancellation (drug debt).

"Fourth, remove the Deputy Minister and officials at the Ministry of Finance who hold concurrent positions in BUMN, because it is against the Constitutional Court's decision and avoid conflicts of interest," he said.

Fifth, Celios also asked for a comprehensive evaluation of tax expenditures, (stimulus and fiscal incentives) that cost the state finances.

He said that companies that have received tax holidays and tax allowances must be audited both financial reports and the resulting impacts on employment.

"There should no longer be fiscal incentives that exacerbate inequality between large-scale companies and MSME business actors. We also encourage transparency in providing regular fiscal incentives to the public," he concluded.