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🇮🇩 Indonesia /Economy & Trade

Deputy Home Minister Urges Regions to Expand Tax Base Without Burdening Residents

From CNN Indonesia · () Indonesian

Translated from Indonesian and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Context piece
  • Deputy Home Minister Bima Arya said regional governments should expand the tax base and use technology instead of relying on higher rates to increase local revenue.
  • He said 86% of Indonesian local governments have weak fiscal capacity and depend heavily on central government transfers, including 96% of regencies.
  • Arya highlighted tax-recording and split-payment applications in Malang and Medan as tools to improve accuracy and prevent fraud.

Indonesia’s local governments should find more taxpayers, improve technology and integrate data instead of taking the quickest route of raising rates, Deputy Home Minister Bima Arya said.

Speaking at a strategic coordination forum in Bekasi, West Java, Arya said efforts to increase locally generated revenue must not place additional pressure on residents. “Extensification without burdening the public means expanding the tax base and upgrading technology, not merely raising rates and burdening citizens,” he said.

Extensification without burdening the public means expanding the tax base and upgrading technology, not merely raising rates and burdening citizens.

· Bima AryaThe deputy home minister explained how local governments should increase revenue.

Arya described stronger regional fiscal capacity as an urgent need. Data presented at the forum showed that 86% of local governments still have weak fiscal capacity and rely heavily on transfers from the central government. The situation is even more pronounced among regencies, where 96% remain in the weak-capacity category.

In Malang there is the Persada application, which many have copied, while in Medan there is split payment, whose impact is quite significant because it prevents fraud, makes tax accuracy 100 percent, and there are no late payments.

· Bima AryaArya cited local technology initiatives that he said improve tax collection.

He also called for technology to improve the accuracy of collections and reduce leakage. Arya praised Malang’s Persada application, which records transactions directly, and cited a split-payment system in Medan. He said the system had helped prevent fraud, produced fully accurate tax records and eliminated late payments.

Arya urged regional leaders to move away from a purely bureaucratic approach when designing fiscal policy. Instead, he advocated “co-creation,” involving stakeholders and using reliable data to develop more targeted solutions. “Co-creation means sitting together to find more valid data,” he said.

My suggestion is to carry out co-creation, once again co-creation, not collaboration, because co-creation means sitting together to find more valid data.

· Bima AryaHe urged regional leaders to involve stakeholders in designing fiscal policy.
About this summary

Originally published by CNN Indonesia in Indonesian. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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