Paying taxes in Indonesia is becoming easier thanks to
digital technology and legal reforms. According to a joint study by financial consulting
firm PricewaterhouseCoopers (PwC) and the World Bank, Indonesia has improved to
the 104th rank among 190 economies assessed.
The study, entitled ‘Paying Taxes 2017’, was released on
Thursday, showing that Indonesia’s rank in 2016 increased by 44 places from the
148th place last year. In 2014, Indonesia was ranked 160th.
“Indonesia’s significant improvement of 44 places in the
Paying Taxes 2017 study reflects the use of electronic social security systems
and on-going positive tax reforms. The government’s focus on improving the ease
of paying taxes is the right step in encouraging tax compliance,” Ay Tjhing
Phan, PwC Indonesia’s head of tax and legal services, said in a statement.
Even though it has a massive potential tax base given the
population of 255 million people, Indonesia’s current tax-to-GDP ratio stands
at less than 12 percent, below the typical Southeast Asian rate of 13 to 15
percent.
Moreover, Paying Taxes 2017, which is based on calendar
year 2015, also found 43 different payments required of each Indonesian
taxpayer annually, taking 221 hours to complete.
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