Faisal Basri Gives Advice To Sri Mulyani Regarding Taxes: Don't Take The Pinworms, Look For The Thick Meat

Indef's senior economist, Faisal Basri. (Photo: Doc. Antara)

JAKARTA - Institute for Development of Economics and Finance (INDEF) senior economist Faisal Basri suggested that the government, especially the Ministry of Finance (Kemenkeu) under the leadership of Sri Mulyani, pursue taxes from the mining, construction and real estate sectors.

Furthermore, Faisal assesses that the more we come here, the tax coefficient in the mining sector and the construction sector is less netted. In fact, the tax revenues of these sectors are not equal to the contribution of these sectors to gross domestic product (GDP).

Referring to data from the Ministry of Finance, the average tax coefficient for the mining sector in 2012 to 2016 was 1.4. However, until the first semester of 2020, this sector's tax coefficient fell to 0.66 percent.

Likewise in the construction and real estate sectors, the average tax coefficient from 2012 to 2016 was 0.5. Meanwhile, in the first half of this year, it only reached 0.48.

In fact, said Faisal, other sectors such as financial services and insurance, trade, manufacturing industry, and transportation and warehousing all recorded tax coefficients above level 1.

"So the percent of tax revenue divided by the percentage of GDP revenue gets a tax coefficient. So hurry up, mining, construction, there are many potential tax values. Start from here," he said in a virtual discussion, Sunday, July 4.

Furthermore, Faisal revealed that the mining sector's tax coefficient is currently decreasing compared to a few years ago. Where it is now at 0.66, in 2012-2016, the average rate of this was at 1.4.

"So there is something strange in mining, in 2012-2016, the coefficient is still above 1, now it's 0.66. Now this is because nickel smelters are given facilities, it's extraordinary that in heaven it's not like that. So we are super heaven," he said.

Therefore, Faisal recommends changing some elements of the taxation of these sectors. In particular is to abolish the imposition of final tax on construction companies.

Instead, said Faisal, these sectors should pay PPh, as with other sectors.

"We removed it. So now they are final taxes. Now apply it like other sectors, pay 22 percent PPh now, next year 20 percent of profits. Don't apply final tax. Most construction companies are also BUMN, it's easier," he said. .

Furthermore, Faisal said the construction sector is the fourth largest contributor to Indonesia's GDP. Therefore, the withdrawal of taxes from this sector will increase the coffers of state revenue.

"So don't take the pinworm. Take the thick flesh," he said.