Tax Optimization through Tax TransparencySunday, 03 January 2016 17:37:21 | Research | (0 view)
Tax is a very important sector in both the strategic and economic order in global and domestic politics. Unfortunately, there are still many obstacles that hinder the optimization of tax revenue both from the tax authorities and taxpayers. To optimize tax revenue, this paper proposes a hypothesis that the increase of taxpayer compliance is an important factor. This can be done by having the taxpayers to use their constitutional rights to require allocation of expenditure that is more useful for public. The low tax compliance should be addressed by focusing on the improvement of taxation base, namely by increasing the number of taxpayers, especially the informal sector, improving tax management system to create professional and reliable tax administration and institutions, and increasing tax transparency both domestically and internationally. Based on the analysis above, this paper proposes some steps for improvements: First, to improve budget expenditure allocations to better reflect justice and the vision of development for the prosperity of the greater people. Second, To improve the number of taxpayers in order to increase taxation base. The informal sector - which consists of underground economy and illegal economy – is a challenge. The government is required to establish the concept and comprehensive system for the small and micro economy sector to be integrated into the formal economic system and is equipped with adequate managerial, personal and administrative competence. Third, to anticipate the weaknesses of administration including quality of service, professionalism apparatus, integrity, and the rule of law - the tax administration reform needs by improving in the quality and performance of the apparatus; by establishing State Revenue Agency as a transformation function and authority of the General Directorate of Taxation and Directorate General of Customs and Excise. Fourth, To prevent the practices of tax avoidance which potentially devastates state revenue, the government must do three things: improving the quality of legal certainty on anti-avoidance rules, having a more formal institutional cooperation which focus on preventing tax avoidance practices, and cooperating with the countries that are members of OECD, G-20, the BRICS, various secretive jurisdictions, and ASEAN on preventing tax avoidance practices.