Indonesia: $300 Million Approved to Further Strengthen Fiscal Reforms

WASHINGTON, KalderaNews.com – The World Bank’s Board of Executive Directors approved a $300 million loan on November 1, 2017 that will help improve the quality of government’s spending, revenue administration and tax policy.

“Building on the substantial progress to date, further fiscal reforms are needed so Indonesia can meet its aspirations. Effective design and implementation of taxation and spending policies can directly and indirectly improve the lives of poor and vulnerable families by making tax systems become more efficient and fair and by better resourcing the government to provide critical services such as health, social assistance, and infrastructure,” said Rodrigo A. Chaves, World Bank Country Director for Indonesia to KalderaNews.

Indonesia has one of the lowest revenue-to-GDP ratios in East Asia and the Pacific. The revenue gap is caused by a persistently low compliance rates, and also partly due to sub-optimal tax policy design which has led to a limited tax base and difficulties in its administration.