Pro-People Taxation: A Path to Economic Stability

All the infrastructure development carried out by the Government of Indonesia certainly requires funding to realize it. Where does the funding come from to finance the infrastructure development? One of the funding sources for infrastructure projects comes from the State Budget (Anggaran Pendapatan dan Belanja Negara - APBN).

The State Budget for the fiscal year 2023 is targeted to reach Rp. 2,463 trillion, with tax revenue targeted at Rp. 1,718 trillion. Undeniably, taxes are the most significant contributor to the State Budget in Indonesia.

The slogan "taxes from the people, for the people" is not just an empty phrase. All segments of society are now feeling the infrastructure development funded by the State Budget. Taxes, as the spearhead of development, deserve support from all Indonesian citizens.

Taxes from the Perspective of Business Owners and Society

From the perspective of business owners and society, taxes play a significant role beyond being the main instrument for achieving economic stability, as seen from the government's viewpoint.

Taxes have a complex role in economic stability. Appropriate tax policies can create a conducive environment for investment and business growth.

Entrepreneurs believe fair and reasonable taxes incentivize them to develop businesses and create job opportunities. On the other hand, inappropriate tax policies can hinder economic growth and make it challenging for business owners to compete globally.

Innovative and targeted tax policies can incentivize investment, innovation, and job creation. Reducing corporate income taxes or providing tax incentives for specific industries can stimulate strategic sectors of the economy.

For the general public, efficient and fair taxes create social and economic stability. Suitable tax collection can reduce economic inequality between the rich and the poor.

The general public expects tax policies that ensure a fair distribution of the tax burden based on individuals' economic capacity. Proportional and transparent taxes will build trust in the government and the taxation system.

Through a progressive tax system, where the tax rate increases as a person's income rises, the government can collect more funds from those who can pay and use those funds for social welfare programs to reduce poverty and social inequality.

In the 2023 State Budget, the majority of state revenues derived from the taxation sector will be allocated for the benefit of society. The education sector is given Rp. 234.1 trillion, the social protection sector is allocated Rp. 241 trillion, the public services sector is allocated Rp. 664.1 trillion, and the health sector is given Rp. 96.6 trillion.

Taxation's Relevance to the Transition toward a Sustainable Economy

In an era increasingly concerned about sustainability, taxes can also play a crucial role in achieving long-term economic stability. For example, environmental or carbon taxes can drive the transition toward a sustainable economy.

By incentivizing companies to reduce greenhouse gas emissions or adopt renewable energy sources, such taxes can promote the growth of green sectors and mitigate adverse environmental impacts.

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