Author: Humairah Nur
Depok, 10 October 2021 – The Community Economic Research Institute (LPEM) Faculty of Economics and Business, University of Indonesia (FEB UI) in collaboration with the Asian Development Bank (ADB) held an Indonesia Development Talk Webinar entitled “Modernization of Regional Tax Administration: Lessons from Local Government Experiences” on Tuesday (5/10) at 09.00-12.00 WIB. The webinar is broadcast live through the LPEM FEB UI official YouTube channel and ZOOM.
Local taxes, as a discourse, are rarely brought up in discussions on taxes. In fact, regional taxes are important to discuss because they have a crucial role in the economy. Through this webinar, LPEM FEB UI and ADB invited participants to discuss local taxes from both the perspective of academics and local government practitioners. In the discussion, Khoirunurrofik, Ph.D., Deputy Head of LPEM FEB UI, as a panelist explained his presentation entitled the benefits of local taxes for regional development and their role in increasing the tax ratio.
The tax ratio or tax ratio is the comparison or percentage of tax revenue to gross domestic product (GDP). This measure shows how capable the government is in financing the needs that are the responsibility of the state. Khoirunurrofik explained that based on the BPS data diagram for the last five years, regional taxes have contributed around 1.27% -1.46% to the tax ratio in the last five years. This is interesting, because while there is a trend for the national tax ratio to decline, the role of local taxes has actually increased in 2020 even though the two are mutually affected by the pandemic. Thus, local taxes also play an important role in increasing the tax ratio. By increasing local tax revenues, fiscal space will be created to carry out government spending that is oriented towards public services, economic development, and social welfare. Furthermore, he explained the key factors in efforts to increase local taxes. First, the process of improving opinion performance with adaptations or new approaches. According to him, local governments, both administrative units and regional economic units, must be able to innovate in response to changes in digitalization. Second, strive for multiplier money circulation and effective spending strategies with long-term and sustainable impacts on revenues to achieve fiscal independence. Third, there needs to be economic cooperation between regions for quality economic growth. “With smart spending, and supported by good governance, I believe that fiscal independence will be created,” said Khoirunurrofik. LPEM UI also presented two representatives of the local government, namely Atika Nur Rahmania (Head of the Communication and Information and Information Technology Office, Provincial Government (pemprov) DKI Jakarta), and I Wayan Adi Arnawa (Regional Secretary of Badung Regency, Bali) to share insights on modernization and optimization policies. local tax.
In her presentation, Atika explained the DKI Jakarta Provincial Government’s innovation in data integration and the one map policy. He also introduced the Jakarta Kini Application (JAKI), an integrated digital public service application. Jaki is an innovation by the Jakarta Provincial Government in modernizing administration, including tax services. Through JAKI, DKI Jakarta Provincial Government seeks to carry out digital transformation of ways of interacting and transacting, starting from society, the economy, to the government. “Digital transformation needs to be supported by infrastructure, regulation, ecosystem and other supports (funding, human resources, as well as data and platforms),” said Atika.
Atika explained that the roadmap for digitizing citizen services to create a digital ecosystem taken by the DKI Jakarta Provincial Government consists of three principles: 1) Gov as a data, the government conducts data collection and data exchange; 2) Gov as a service, the government provides API services (application program interface) to integrate digital services; 3) Gov as a platform, as an integrated public service provider in the form of a website or application. In managing technology, Atika stated that the community aspect is one of the important challenges that must be faced.
In managing technology, Atika stated that the community aspect is one of the important challenges that must be faced. Quoting Otto Scharmer, Atika suggested that society shift from an ego-system economy to an ecosystem economy, a system that considers various aspects to support digital economic development. “This is what will help us take full advantage of the digital aspects as well as face the challenges going forward. If the government still thinks ego-system, then all development in various aspects will not materialize,” he said. Badung Regency, Bali also attempted the same thing.
I Wayan said that his area is trying to switch from conventional public services to digital services. Badung Regency, in his presentation, has an integrated system between the regional government and the regional licensing office. This system is intended to monitor existing investments in Badung Regency, so that local governments can find out potential taxpayer revenues in their area. In addition to modernization, Badung Regency also encourages the improvement of human resource competencies, especially in the field of administration. “We have collaborated with the Directorate General of Taxes (Directorate General of Taxes) to provide education and training to our workforce, including working with several universities in Bali regarding the use of technology to optimize local taxes,” he said.
keynote speaker namely Jiro Tominaga (Director for Indonesia, ADB), Teguh Dartanto (Dean of FEB UI), Bhimantara Widyajala (Director of Capacity and Implementation of Transfers of the Directorate General of Fiscal Balance, Ministry of Finance), Said Zaidansyah (Deputy Director for Indonesia, ADB), and Riatu M. Qibthiyyah (Head of LPEM FEB UI). In closing, reruns of this webinar can be seen on the LPEM FEB UI official YouTube channel.
