Even more contradictory, while the rich’s share of income is very high, tax revenue is actually very low. It was only during Jokowi era that the ratio of tax revenues to the economy reached its historic low, only 9 percent. Compare this with the average ratio of tax revenues in Asian countries which reaches 19 percent (twice as much!). Or compare it to the US, where it is 26 percent. And what about Sweden? Well, it isn’t even comparable, because Sweden’s rate is 42 percent (four-fold that of Indonesia!)
What does it mean? This means that the Jokowi administration has failed to collect taxes from the rich. The rich have even been given tax amnesty, not once but twice, which never happened anywhere in the world. The tax officials are corrupt, conniving with the rich to cheat the system and deprive the state of vital revenue. Even echelon-3 (mid-rank(- ing) taxman like Rafael Alun has assets worth Rp500 billion. We can logically conclude that the tax relief provided by Rafael Alun to wealthy taxpayers must have reached tens of trillions of Rupiah. That’s from one Rafael Alun alone, what about his friends who haven’t been exposed yet, or his superiors. It is no exaggeration if we say that the potential tax revenue losses due to alleged collective corruption is estimated to be in the ballpark of hundreds of trillions of Rupiah.
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Due to the lack of tax revenue, the government must rely on high-interest debt securities. The high interest payments are taken from the already meager public coffers (or from new debt), and paid back to the rich — who deposit their money in the debt-buying banks. Fertilizer subsidies for farmers were abolished, workers’ salaries were cut, energy subsidies were slashed thereby weakening purchasing power. Meanwhile, tax evasions by the rich were forgiven, their tax payments could be negotiated, and even their wealth was subsidized with high-interest debt securities. So is it any wonder that Indonesia is still not a prosperous country? Because here only a small coterie of the rich are prosperous, while the majority of the people can only dream of prosperity. (Gede Sandra)