Proposed Wealth Tax Hard to Implement, Says Finance Minister's Staff

TEMPO.CO, Jakarta - The Finance Minister’s special staffer for communications Yustinus Prastowo on Thursday said it would be difficult to implement a wealth tax in the country due to issues related to inventory and asset valuation. 

“It is even difficult to adopt in developed countries. I might argue the challenges would be similar in Indonesia,” said the special staffer for Minister Sri Mulyani at the Finance Ministry’s headquarters on March 2. 

Prastowo backed the Indonesian taxation system, which he said is acceptable but acknowledged that the administrative aspect could be made easier to achieve a just system. “We will look into this with the directorate general of taxation.”

Center for Indonesia Taxation Analysis (CITA) tax observer Fajry Akbar previously said wealth tax could be a way to prevent state officials from flaunting their lavishness. "It's worth considering," he told Tempo on Monday, February 27.

According to Fajry, in 2021, the International Monetary Fund (IMF) provided recommendations for the implementation of a wealth tax to overcome the budget deficit problem due to the Covid-19 pandemic. Indonesia itself has a budget deficit target of below 3 percent in 2023.

However, the implementation of the wealth tax is only for a temporary period in the context of improving post-pandemic financial conditions. In addition, Indonesia also still has homework to reduce inequality. "I think the wealth tax can be a solution," said Fajry.

Talks about wealth tax came to light again after the son of a taxation office official was named a suspect of deadly physical abuse. This person is known to show off his lavish lifestyle on his social media platform. 

RIRI RAHAYU

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