International Cooperation against Tax Evation Important: Sri Mulyani

Finance Minister Sri Mulyani Indrawati shakes hands with with Malaysia’s Deputy Minister of Finance Johari Abdul Ghani, as IMF Deputy Managing Director Mitsuhiro Furusawa (C) stands during the International Tax Conference here on July 12.

Jakarta, 19 Shawwal 1438/13 July 2017 (MINA) – Finance Minister Sri Mulyani Indrawati has stressed the importance of international cooperation against tax evasion by big corporations and rich businessmen.

“Tax evasion has to be eliminated and this is not the fight of individual country. It is a struggle against mutual enemy,” Antara News quoted Sri Mulyani as saying when opening a IMF-Indonesia Joint Conference here on Wednesday.

The conference with a theme “International Taxation in Asia: Issues and The Way Forward” is participated in by stakeholders, Asian senior officials and international tax experts.

Sri Mulyani said the strengthening of the international cooperation commitment had been stressed through automatic exchange of information (AEOI) on tax to be joined by Indonesia in 2018.

“Taxation cooperation is crucial. Indonesia believes that consistent action plan of base erosion and profit shifting (BEPS) and AEOI are effective in reducing the practice of tax evasion.

She said taxation cooperation is crucial as in the present era of economic globalization and digitalization, prevention of tax evasion through shift in profit to the state with low and free taxes is still practiced.

“In the era of globalization we need new regulation and commitment to meeting the challenges, as aggressive tax planning at present has become something normal by multinational corporations,” she added.

Revenues from the taxation sector have become one of instruments to give sense of justice and could contribute to the welfare of low income people narrowing economic gap, she said.

“We have to reduce the bad influence of those refusing paying taxes, while we have to pay the cost of building social infrastructure which is vital for economic development,” she said.

Creating a fairer and more balanced playing field

Sri Mulyani called on countries not yet adopting BEPS Action Plan and AEOI to start considering to use the instruments to create a fairer and more balanced playing field.

Speaking about reformation in taxation sector in the country, Sri Mulyani said the Indonesian tax authorities would be consistent in carrying out reformation in the taxation system to increase tax base and improve the public awareness of taxation.

The international tax conference is a forum for policy makers to discuss issues related to mobilization of domestic resources to strengthen taxation system, BEPS Action Plan, AEOI and tax incentives.

The meeting also constitutes part of a series of actions ahead of the annual IMF – World Bank meeting to be held in Bali in October next year.

The international tax system is changing rapidly as a result of coordinated actions by governments and of unilateral measures designed by individual countries, both intended to tackle concerns over base erosion and profit shifting and perceived international tax avoidance techniques of high-profile. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)