World Bank Recommends The Efficiency Of Tax Revenue And Expenditure Quality

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JAKARTA - The World Bank recommends the efficiency of tax revenues to increase state revenues and the efficiency of state spending quality.

"Reformation to increase the mobilization of domestic income remains a top priority," said senior economist at the Wael Mansour World Bank, quoting Antara.

The application of the Tax Harmonization Law (UU) will support these efforts. However, considering that the tax gap of 6 percent of gross domestic product (GDP), additional reforms to expand tax bases, increase compliance, and reduce the spread of informality among the business world will be important.

Special reforms can include lowering tax thresholds, reviewing tax exemptions, especially those that do not benefit the poor and middle class, and increasing compliance, including through data sharing efforts with third parties.

In the medium term, Wael continued, tax collection can also be increased through third-party data that helps track and verify revenues.

In addition to the need to increase income, improving spending quality is also very important, especially for social protection, health, and improving human resources.

"This can be done by diverting resources from undereffective programs and subsidies, such as energy subsidies, to be spent on social protection that is beneficial for all Indonesian people throughout their life cycles. Existing systems such as national health insurance can also be utilized," he said.