Civil 20 (C20), a forum for civil society organizations from around the world that engage with governments in the G20, invited the Faculty of Administrative Sciences of Universitas Indonesia (FIA UI) to discuss proposals related to tax transparency and accountability. The discussion will later be brought to the peak of the G20 event in Bali in November 2022.
During the discussion, Dra. Inayati, M.Si as the Head of the Department of Fiscal Administration said that tax justice is a very important issue to be discussed. What tax justice is and how it relates to transparency and accountability needs to be known by the public.
“This issue is very crucial because it relates to public trust in the government and policy makers, sustainability, and becomes something very important and fundamental,” said Dra. Inayati in the Pre C-20 Summit – TSF WG event “Road to G20 Summit: Addressing Transparency and Accountability toward Sustainable Finance, Tax Justice, and Sovereign Debt Regulation” which took place hybridly at the FAS UI Building and through the Zoom platform on Thursday, (22/09).
Furthermore, the Chairperson of the Academic Senate of the Faculty of Administrative Sciences of the Universitas Indonesia (FIA UI) as well as academics from FIA UI Dr. Ning Rahayu, M.Si., emphasized that the activeness and role of the community in the decision-making process and the implementation of the G20 in Indonesia is very important. “Regarding the appointment of foreign digital business actors to collect VAT. In order to anticipate the misappropriation of VAT collection results by foreign digital companies, it is proposed that the application of provisions related to cross-border tax collection assistance be streamlined,” said Dr. Ning.
This was expressed by Dr. Ning in response to the policy proposals that have been made by C20 members to address global issues regarding taxation in Indonesia. There are five issue topics including, the National Taxation issue topic which discusses Wealth Tax as a strategic alternative revenue source to fund health financing, poverty reduction, and reduce inequality; incorporating gender equality dimensions in tax policy; the G20 must ensure an effective, transparent, and accountable carbon tax mechanism; the need for the establishment of a UN Tax Body for Global Taxes (UN Tax Convention); and tackling illicit financial flows and poor transparency such as in the Base Erosion and Profit Shifting (BEPS) Inclusive Framework Pillars 1 & 2.
In addition, there were two topics of issues discussed at the meeting, namely sustainable finance and the issue of sovereign debt treatment. The topic of sustainable finance consists of three ideas, namely the need for a more progressive, inclusive and coherent G20 sustainable finance agenda through the implementation of legally binding regulations and measures; G20 jurisdiction for the establishment of a green taxonomy or sustainable taxonomy, involving CSOs and all stakeholders from the beginning of policy making; and the need to fully integrate equity principles into the transition framework.
On the last topic, the discussion was the issue of the treatment of state debt, which consisted of four things. First, the need for reform of the global debt architecture under UN supervision that creates a clear, more timely, and orderly debt restructuring mechanism; second, the need for a more effective debt relief approach and enforcing the participation of all creditors, including the private sector (International Financial Institutions); third, creating more fiscal space for countries, especially for countries that are in the process of debt restructuring. The debt restructuring process consists of: 1) issuance of IMF SDR funds, 2) SDR re-channeling, 3) provide more grants, 4) soft loan mechanism. And the fourth thing discussed is to ensure that “Global Emergency Financing” does not take the form of debt and increase the risk of debt vulnerability for countries in need.
“C20 as an official engagement for the G20 is committed to emphasizing the discussion of issues that are factual and can address problems. Indonesia as a developing country is committed to voicing the interests of other developing countries together with the C20,” said Executive Director of Prakarsa as well as Sherpa C20 Indonesia Presidency 2022, Ah Maftuchan. He mentioned that the main purpose of organizing the C20 event is to maintain tax accountability, which means that what is delivered to the public is the result of what has been done and delivered transparently.
Dr. Alin Halimatussadiah, head of environmental economics at the Institute for Economic and Social Research, Faculty of Economics and Business, UI, responded to the TSF WG C20 policy recommendation on sustainable finance. “Sustainable finance is a way to integrate risk and environmental and social aspects, reduce risk, increase green portfolios and social impact, then create an opportunity,” he said.
On the occasion, Faisal Basri revealed that the core of the proposal given by C20 is how to encourage world development that is not just hyperglobalization, but also inclusive, in accordance with SDGS, and participatory development that involves the community in policy formulation.
“Indonesia’s role in the G20 for International taxation Issues, namely as the G20 Presidency in 2022 for international taxation issues, cannot be separated from its responsibility in determining priority agendas, encouraging discussions, and coordinating policies to realize commitment and cooperation among G20 member countries in dealing with international taxation issues,” said Head of Sub-Directorate of International Taxation Agreements and Cooperation Leli Listianawati.
