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JAKARTA - Indonesia will from the middle of this year start using a new software to better track taxpayers compliance, a long-awaited system upgrade aimed at preventing avoidance and boosting revenues, its finance minister said on Tuesday.
Indonesia has one of the lowest tax-to-GDP ratios in the Asia-Pacific region at around 10%, despite numerous efforts by its governments to increase revenues, including two tax amnesty programmes launched by President Joko Widodo in 2016 and 2022.
The "core tax system" was intended as a follow up to Widodo's first tax amnesty, which uncovered previously unreported assets worth around $330 billion. But the project was delayed for years.
The system would sync information gathered during the amnesty with data managed by different authorities in order to spot any taxpayers' noncompliance to rules.
"(The core tax system) will hopefully address the issue of governance, provide more certainty, speed, as well as quality of services for the taxpayers," Finance Minister Sri Mulyani Indrawati said at an investment forum, adding the system is expected to change the business process of tax authorities.
The system upgrade has cost the government around 1.75 trillion rupiah ($111.01 million), less than the originally allotted budget of 3 trillion rupiah, senior finance ministry official Iwan Djuniardi told Reuters.
The new system would be launched before Indonesia swears in a new president in October. Presumed presidential election winner Prabowo Subianto told the same forum earlier on Tuesday he wanted to improve Indonesia's tax ratio by widening the tax base, not necessarily by raising taxes.
($1 = 15,765.0000 rupiah)
(Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and Ros Russell)