It's Not Always About Profits. Government Admits Windfall Revenue Brings Challenges to the Taxation Sector

Illustration (Photo: Doc. Ministry of Finance)

JAKARTA - Deputy Minister of Finance (Wamenkeu) Suahasil Nazara said the tax administration is currently facing a very challenging situation amid a surge in international commodity prices.

According to him, in several countries where commodity prices are rising, such as in Indonesia, taxation enjoys a fairly large windfall revenue.

Something is different because of exposure to international commodity prices. As producing countries, we will be in a very challenging situation to manage the budget," he said in a written statement on Thursday, September 1.

According to Suahasil, the challenge experienced by commodity countries such as Indonesia is to ensure and anticipate commodity price volatility.

"It's important not to get carried away, but it's important to be very careful with global developments in commodity prices," he said.

Suahasil added that if certain countries are relatively low or do not even produce commodities, the challenge is managing tax collection and mobilizing domestic resources.

So that it can continue to support economic growth, the economic recovery of each country. The government considers this a very challenging time and actually working together will be very important, allowing us to maximize all knowledge for the time to come, he explained.

Furthermore, Sri Mulyani's representative emphasized that multilateral tax cooperation is very monumental and important to continue to be discussed under the G20 and OECD.

The two pillars of international taxes will be very important for all countries. I would like to encourage the Asia Initiative meeting to continue discussions on that," said the Deputy Minister of Finance.

Suahasil also expressed his gratitude to all parties, such as the Asian Development Bank, Commonwealth Association of Tax Administrators, International Finance Corporation, the Study Group on Asia-Pacific Tax Administration and Research, and the World Bank for all its ongoing support and commitment.

I hope we can maintain our commitment, an important strategy for as long as possible. I want to encourage discussion and cooperation to continue," he said.

For information, the Directorate General of Taxes (DGT) of the Ministry of Finance held the Second Asia Initiative Meeting from August 31 to September 2, 2022, in Bali.

The event is a high-level meeting agenda in order to discuss Asia's regional priorities in the field of tax transparency and the exchange of information.