Finance Minister Sri Mulyani Indrawati revealed that up to 47% of economic activities in Indonesia are currently exempt from taxes, positioning Indonesia as the country with the highest tax exemption rate. Speaking at the Mandiri Investment Forum 2024 in Jakarta on Tuesday, March 5, she emphasized that more than 47% of economic endeavors have yet to fall within the tax assessment framework, leaving only 53% for tax collection and enforcement. The substantial proportion of tax-free economic activities is not solely attributed to the high number of informal workers in Indonesia but also to the government's implementation of tax incentives, including specific income exemptions.

However, concurrently, Indonesia also needs to enhance its tax ratio. As of 2023, Indonesia's tax ratio stood at 10.21%, lower than the 10.39% recorded in 2022. Therefore, fiscal management institutions are advocating for an increase in the tax ratio. One approach is through the development of a core tax system, which will soon be implemented. Sri Mulyani highlighted that boosting the tax ratio isn't solely about expanding the tax base and adding tax objects. Improving services and encouraging taxpayer compliance are also crucial for achieving optimal tax performance. Additionally, globally, finance ministers from G-20 member countries continue discussions on the two-pillar approach to global taxation. Under Pillar 1, the proposed solution ensures fair taxation rights and tax bases in the context of the digital economy. Meanwhile, Pillar 2 addresses a global minimum tax for companies operating internationally to prevent tax avoidance and evasion practices. Sri Mulyani expressed hope for agreement on these matters, emphasizing their significance in addressing global challenges and vulnerabilities.

Source: https://mediaindonesia.com/ekonomi/656609/menkeu-sebut-47-persen-aktivitas-ekonomi-masih-bebas-pajak