In addition to creating good governance of tax institutions, the Minister of Finance can practically follow what is done by developed countries to realize tax transparency. An example is PPN transparency in Japan.
PPN is a tax imposed on trade in goods and services which taxpayers carry. Taxpayers are generally entrepreneurs, but consumers are charged with Papuan, because entrepreneurs only deposit taxes collected from consumers. Currently, the amount of PPN in Indonesia is 11%.
In Japan, the amount of PPN is only 10%. If we shop at mini-markets or supermarkets in Sakura country, as consumers, we will know how much the goods we will buy cost and the amount of tax.
Minimarkets and supermarkets in Japan must post the price before and after being taxed on shopping windows, unlike the case in Indonesia. Consumers do not know the cost of goods purchased before and after taxes, because there is only one price that minimarkets or supermarkets in Indonesia post. While this difference does look simple, it must be admitted that the Japanese government can fulfill PPN transparency rights for its citizens.
Next, another lesson that we can emulate from Japan is the practice of digitizing taxation. Tax digitization helps increase the tax ratio and avoid tax evasion. Digitization of taxation must be carried out to the lowest institution without exception, because the longer the manual tax administration bureaucracy chain, the greater the possibility of leaks.
Furthermore, if we compare the tax ratio statistics for Japan and Indonesia during the 2020 Covid-19 pandemic, there was a difference of 21.6%. Japan has a tax ratio of 33.2%, and Indonesia 11.6%. Japan’s tax ratio is in a “high” category in Asia.
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After talking with Japanese student colleagues, the writer, currently studying in Japan, got three answers about why Japan’s tax ratio is so high. First, early tax literacy. Elementary school teachers in Japan instill in their students that paying taxes is one of the obligations of a citizen. Second, is the culture of shame. The shame of not paying taxes in Japan is ingrained. Third, the ecosystem supports transparent tax literacy. One of the practices has been described in paragraph six of this paper.
The efforts of the Japanese government in creating a transparent tax ecosystem are exemplary. The practice of tax transparency will make the impact of the Law on Harmonization of Tax Regulations (UU HPP) more quickly felt, namely, the creation of citizen compliance in paying taxes and the realization of national economic stability. Likewise, social inequality can be minimized with taxes. As closing information, the author is a tax beneficiary because he received a doctoral education scholarship from a Japanese citizen’s taxes.