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Indonesia wants more tax from mining

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The mining industry is one of four the Indonesia’s Directorate General of Taxation will be targeting in 2013 in a bid to collect more tax. The authorities also want to improve the ability of officers to detect tax avoidance and boost compliance.

Official data shows that slow global economic growth and a reduction in demand for minerals, which contributed to lower prices and profits, led to a fall in tax receipts from the sector last year.

The government’s tax revenue target for 2013 is Rp1,031.8 trillion ($107 billion). Last year it aimed to collect Rp879.4 trillion but only brought in Rp831.3 trillion.

“The booming sectors are manufacturing, mining, plantations and financial services,” said Fuad Rahmani taxation director general, during a press conference in Jakarta this week. “We also plan to reevaluate construction and property, as well as the transportation sector, to optimise potential tax income from those sources,” he added.

Rahmani and his staff will also try to increase Indonesia’s corporate tax base during 2013, the Jakarta Post reported.

Only 500,000 businesses are registered as taxpayers, official data shows, though there are believed to be an estimated 22 million potential businesses in Indonesia.

“So far, we have not been able to properly conduct a significant tax-base extension. This means that there is still a lot of room for our tax income to grow,” Fuad said.

The director general added that staff needed to increase their skills to deal with tax avoidance.

“We need to improve our officers’ capacities. They need to take more initiatives and be creative. Taxpayers have become more and more sophisticated in avoiding taxes, therefore, our officers need to improve as well,” he said.

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