Indonesia's Tax Compliance Lowest in Southeast Asia  

TEMPO.CO, Jakarta – Yustinus Prastowo, executive director of the Center for Indonesia Analysis Taxation (CITA), said that Indonesia has the lowest tax compliance for value added tax (VAT) compared to other countries in Southeast Asia. "Only 50 percent of taxpayers report their taxes, the other half are not absorbed," he said yesterday.

Indonesia's individual tax ratio is below one percent, way behind on Singapore (24 percent), Thailand (22 percent), and Vietnam (25 percent).  

According to the CITA, as of last year Indonesia has 24.3 million taxpayer identification numbers (NPWP) with 17.7 million tax notices registered. However, the tax efficiency level only reached 53.8 percent of the total value that the state should have received.

Prastowo said there are 60 million potential taxpayers in the country, of which some two millions are subjects of corporate tax. However, only 500,000 taxpayers report their taxes, which make it unsurprising that Indonesia's high economic growth does not lead to an increase in potential tax revenue.

"It's obviously a great untapped potential," he said.

JAYADI SUPRIADIN