World Bank Says Indonesia Has Worst Tax Regulation, Luhut: We Are Compared to Nigeria

TEMPO.CO, Jakarta – Chair of the National Economic Council (DEN) Luhut Binsar Pandjaitan was offended by the World Bank‘s statement saying that Indonesia was one of the worst countries in collecting taxes. This was conveyed by the World Bank to Luhut when he visited the DEN Office three weeks ago.

“He gave a presentation, saying that Indonesia was one of the countries with the worst tax collection. We were compared to Nigeria at that time, I was offended,” said Luhut, at the Early Year 2025 Spirit event at Menara Global, South Jakarta, Wednesday, January 15, 2025.

Luhut said the World Bank estimated that if Indonesia was able to manage taxes optimally, state revenues could increase by up to 6.4 percent of Gross Domestic Product (GDP). This figure is equivalent to additional revenue of Rp1,500 trillion.

He also told the World Bank that Indonesia plans to create a digital government service or Government Technology (GovTech) to make it easier for the government to monitor every economic movement. “This is the same as PeduliLindungi during the Covid-19 Pandemic. We barely spent any money there, but with PeduliLindungi we were able to control population movement and security in one building, one area, reducing the spread of Covid at that time,” he said.

Luhut said that currently the government already has a digital service for the mineral and coal information system for ministries/agencies (SIMBARA) to regulate taxes. Through this system, all production activities, including mineral imports and exports, can be recorded and tracked. “How much has he exported, has he paid royalties or not, is there debt to the government or not. Once that happens, it is automatically blocked,” he said.

Luhut targets that the Govtech application can be running in August, and optimally in the next three years. According to him, there are 300 children of the nation involved in creating the digital service. “So this is not an import. Peduli Lindungi also helps directly,” he said.

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