Hashim urges stronger tax collection, warns of capital flight risks
Kadin advisory board chairman Hashim Djojohadikusumo, who is also President Prabowo Subianto's younger brother, said Indonesia's state revenue amounted to just 12 percent of GDP, compared with 18 percent in Cambodia and 23 percent in Vietnam.
Hashim Djojohadikusumo, the chairman of Kadin advisory board and President Prabowo Subianto's younger brother, has called for stronger tax collection in Indonesia. He highlighted that the country's state revenue is only 12 percent of its GDP, whereas Cambodia's and Vietnam's are 18 percent and 23 percent, respectively. Hashim believes Indonesia has the potential to generate an additional Rp 1.5 quadrillion (US$82.6 billion) annually by matching Cambodia's tax-to-GDP ratio.
The prominent businessman and special envoy for climate and energy argues that this disparity is due to weak revenue collection, not a lack of economic potential. He pointed out that 30 to 40 percent of Indonesia's economic activity remains unrecorded, which amounts to approximately Rp 10 quadrillion in transactions. Hashim attributed this gap, in part, to cash-based transactions and the absence of receipts for many services, leading to uncollected value-added tax (VAT).
He mentioned that the government is taking steps to address the issue by expanding electronic tax collection through artificial intelligence, aiming to raise Indonesia's revenue ratio to Cambodia's level within two to three years.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
