Tax Reform Is Needed, Celios Expresss The Strategy Of Rich People To Avoid Taxes

Rupiah (Photo: Antara)

JAKARTA - Director of Fiscal Policy from the Center of Economic and Law Studies (Celios) Media Wahyudi Askar, revealed a number of strategies used by the super-rich in Indonesia to avoid tax obligations.

According to Media, super-rich groups have various loopholes to avoid tax burdens, ranging from capital gains that have not been realized to assets stored abroad.

He explained that what is meant by super-rich is not individuals with an income of Rp. 40 million or Rp. 100 million per month, but those who are able to earn tens of billions of rupiah every month.

"But those whose income can be tens of billions in one month. Even Warren Buffett also said that, why don't the super-rich pay taxes in percentage significantly, because the super-rich are also confused and cannot report to their secretary self-assessment how much money is in their own pocket and so many capital gains have not been realized," he said at a press conference, Tuesday, August 12.

The media said that the tax system in Indonesia is currently not fully able to access all of these sources of income, especially in terms of capital gains that have not been realized.

He added that this condition causes the contribution of taxes from the richest circles to be incomparable to the wealth they have, so that the tax burden is actually more borne by the lower middle class.

One way that conglomerates often use, according to the Media, is to take advantage of tax haven countries, namely jurisdictions with low tax rates or even zero, so that in those places, they store assets and carry out transactions without the supervision of Indonesian tax authorities.

The media explained that the owners of large assets set up shell companies abroad, then carried out various transactions on behalf of the company, so that profits were recorded in tax haven countries, and tax obligations in Indonesia became very minimal, even close to zero.

"With conditions where there is a tax haven today, where rich people put their assets abroad, create shell companies, and then the transaction is carried out on behalf of the company that is abroad. Now, these conditions continue to be discussed over the last few years regarding fair taxation," he said.

To answer these challenges, the Media emphasized the need for tax system reforms that are not only carried out at the national level, but also through international cooperation.

In addition, the Media emphasizes the importance of implementing progressive taxes as a whole, including on capital gains that have not been realized, whenever possible.

"So, I believe that all these economic problems may be resolved with a fair tax system," he concluded.