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Revenue and Distributional Impact Analysis of Indonesian Personal Income Tax Reform in 2008

Author

Listed:
  • Bimo Wijayanto

    (Kedeputian Bidang Kajian Pengelolaan Isu-isu Sosial, Budaya, dan Ekologi Strategis – Kantor Staf Presiden)

  • Yogi Vidyattama

    (The National Centre for Social and Economic Modelling (NATSEM) & Institute for Governance and Policy Analysis (IGPA) University of Canberra)

Abstract

Since 1983, Indonesian tax policy has been the subject of ongoing reforms in order to replace the old colonial tax arrangements, reduce income dependency from oil and gas, decrease the government’s foreign debt and maintain its fiscal sustainability. Nevertheless, after 25 years of reform, actual Indonesian tax performance is still far from what might have been expected as Indonesia have one of the lowest total tax ratios among the ASEAN countries. This research show that the most recent changes put in place may have reduced potential tax revenue from personal income but an increase in the compliance rate.

Suggested Citation

  • Bimo Wijayanto & Yogi Vidyattama, 2017. "Revenue and Distributional Impact Analysis of Indonesian Personal Income Tax Reform in 2008," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 63, pages 97-113, December.
    • Handle: RePEc:lpe:efijnl:201706
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    personal income tax; microsimulation; Indonesia;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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