Sri Mulyani Echoes Tax Reform With Two Aspects, What Are They?

Minister of Finance, Sri Mulyani. (Photo: Doc. Setkab)

JAKARTA - Finance Minister Sri Mulyani Indrawati ensured that the government will continue to implement tax reform in order to realize a healthy and fair system.

"Tax reform focuses on aligning the system to fit the best practices and is able to anticipate the dynamics of medium-long-term socio-economic factors", said Minister Sri Mulyani in the Plenary of the House of Representatives submission of the macroeconomic framework (KEM) and Fiscal Policy Principles (PPKF) State Revenue and Expenditure Budget Draft (RAPBN) 2022 in Jakarta, quoted from Antara, Thursday.

Minister of Finance Sri Mulyani said reforms were made to make the tax system healthy which means effective as a policy instrument, optimal as a source of income, and adaptive to changes in the structure and dynamics of the economy.

Reforms are also being made, she said, in order to create a fair tax system in providing certainty of taxation treatment, encouraging voluntary compliance of taxpayers, and creating a balance of tax burdens between income groups and between sectors.

Minister of Finance Sri Mulyani mentioned that tax reform covers two aspects of improvement, namely administrative aspect and policy aspect.

Administrative reforms include strengthening institutions and human resources, integration of information systems and taxation databases, simplification of administration, sharpening of supervisory functions for taxation intensification, and equitable law enforcement.

Meanwhile, policy reforms are geared towards expanding the base of taxation and finding new sources of acceptance. This is done, among others, by improving vat collection and reducing its regressivity, and strengthening the policy of imposition of income tax, especially for private people.

Then also strengthen the potential for the introduction of new types of levies, especially related to externality to the environment.