The 2024 Tax Base is Stagnant, Shadow Economy and Compliance are the Reasons

The government assesses that the tax base in 2024 will still be stagnant. This is due to the high shadow economy activity and low tax compliance.

The government is targeting tax revenue in the 2024 State Budget (APBN) of IDR 1,988.9 trillion, an increase from the 2023 tax revenue outlook pegged at IDR 1,818.2 trillion.

Shadow economy is an economic activity that runs informally and is not covered by taxation, for example, due to changes in the economic structure from conventional to digital.

The high level of the informal sector needs to be considered because its existence is not fully covered by the tax system.

Quoting Kontan.co.id, the high level of informal sector activity is driven by the increasing contribution of the service sector in the economic structure. This can be seen from the number of Indonesia's informal workforce, which is above 50% of the total workforce in Indonesia. 

The government hopes that the policy of matching the Taxpayer Identification Number (NPWP) with the National Identity Number (NIK) can facilitate the tax administration process.

In general, the taxation policy for 2024 that has been prepared by the government includes, first, encouraging the level of compliance and technology integration in the tax system.

Second, expanding the tax base through intensification and extensification. Third, strengthening synergy through joint programs, data utilization and law enforcement. 

Fourth, maintaining the effectiveness of the implementation of the Harmonization of Tax Regulations Law. Fifth, providing more targeted and measurable tax incentives to support business climate and competitiveness. (ASP)