Tax revenue is the main source for Indonesia. In terms of the economic perspective, the tax is a resource from the private sector to the public sector. This understanding suggests that the tax causes the two situations to be changed. First, it will reduce ability of the individual to control the resources. Second, it will increase revenue to the state. Seeing this, many people think that paying the tax rate would reduce their wealth so that they take the initiative to not register as taxpayers. They assume the tax would make the government become increasingly rich. Of course it is the wrong assumption. On the other hand many cases reveal that the tax has a positive effect on economic development in the country of Indonesia.
Tax can help to avoid the inflation rate in Indonesia. By providing tax, consumers will reduce their consumption as part of their income to pay taxes. Inflation occurs due to the increasing consumption that wants to live beyond their economy and excess liquidity in the market which may trigger consumption. If this tragedy is allowed to happen then the economy will become chaotic and sluggish. The way to press and minimize inflation rate in Indonesia which has reached 6.65 % based on data Central Bank of the Republic of Indonesia on March 2011, Indonesian government need to take fiscal policy. One of the ways is by giving taxes toward people in Indonesia. Taxes given by the Indonesian government to the people of Indonesia in the form of value added tax, motor vehicle tax, income tax. This tax is meant for people to reduce household income and purchase power for their consumption after that people will deposit more money to the government as tax payments, so that can reduce the amount of money in circulation which can cause inflation. Thus, to reduce levels of Indonesian people of excessive consumption that can increase the rate of inflation, one of which is correct actions taken by the government is to give and provide the tax.
In addition tax also has the function to regulate and control delivery export-import in Indonesia. Indonesian Government tries to protect domestic production by setting a high import duty for foreign products. According to the opinion of one person on yahoo answer (Sakul, 2008) stated, “When the Government of Indonesia lowered its import VAT tax from 10% to 6% (as in Singapore). What will happen? Imported products will definitely go with the proliferation and local products will lose competitiveness of local products especially if the craft community or processed products of small enterprises. What will happen to the fate of farmers, fishermen, craftsmen, traders and small businessmen in this country?” Then he also added a statement, “If CEO export tax (palm oil) is lowered, then in Indonesia will be difficult to search for oil, because everything is exported abroad. Or if the export tax is increased then there is no export of palm oil CEOs and where farmers want to sell the crop?” From that statement (Sakul, 2008), it can be interpreted that the tax was to control export and import in Indonesia so as not too excessive. It will maintain the safety of the people's economy that has business, jobs in small enterprises. So that the tax position here is a barrier for foreign products as well as local products that do not freely enter and come out the country of Indonesia.
Tax is one of the most potential as an income for financing the government expenditure. Taxation revenue is also used by the government to finance the construction of infrastructure facilities and public interest for people in Indonesia. From economist among the domestic, Rochmat Soemitro said, “Taxes are the dues to the people of the state treasury (the transition of wealth from a private sector into the government sector) under the law (which can be imposed) by not getting services that directly can be utilized and used to finance public expenditure. Furthermore it is supported by a statement from the father of economics Adam Smith who emphasized, "Tax is a contribution from the citizen to support the state". Some economists stated the tax is a contribution from society to participate actively to build the development of the country, to build public facilities and infrastructure. This is because tax is the basic foundation for the development of Indonesia. Moreover, in terms of development, it will affect to the Indonesian economy that is indicated as has developed and progressed. Beside that taxes are also useful to perform routine tasks to countries such as employee expenditures, spending on goods, maintenance the facilities, pay off the Indonesian debt, education expenses, paying the dues of some organizations that followed by Indonesia. This shows how important the tax for the Indonesia country because the tax is a source of income for financing those government expenditures.
Tax has a role to assist the government to allocate tax revenues. Tax revenues obtained by the central government will be transferred to the provinces, districts, and cities. The main sources such as property taxes, charges associated with acquisition of land and buildings (BPHTB), and income tax. Most of the revenue is returned to the regions, except the income tax that were transferred to the regions only 20 percent: 12 percent for city and 8 percent for the province. So with the system of allocation of tax revenues will help the equality of provinces or districts that have not been fully developed and welfare the regional economy in Indonesia.
From collecting taxes in accordance with the mechanism, then the government can allocate income on investment that can be enjoyed by many people. With the availability of many investments, it will increase field worker and make job opportunities for the people income in Indonesia. According to Prof. Dr. H. SH Soemitro RochmatTax is the transition of wealth from the people of the State Treasury to finance routine expenditure and the surplus is used for public saving which is the main source to finance public investment. The implication from the statement is tax can lead for the investment in Indonesia. For example about PT. PLN (Persero) as one of the BUMN that have the power in the electricity sector wants to build a geothermal project investment. But the burden of investment costs is not borne alone by the PLN. And then the price of electricity which was considered by the investors is less attractive. Government takes the policy by applying the tax system. It is capable of encouraging the development of geothermal investment in Indonesia because the reduction tariff geothermal is significant enough. From the other side, this will affect the opening of job opportunities and give chance for job seeking. In other words it will increase sources of income in Indonesian people that can give benefit for economic development in Indonesia.
Although many people or entities who think that paying taxes will reduce the wealth and ability to control resources, many positive effects resulting from paying taxes on economic development in Indonesia. It can be concluded that taxes play a role in suppressing the rate of inflation, control the export and import, as country income to finance government expenditures that give benefit the growth of infrastructure, stimulate investment, and influence the opening of job opportunity. However pay tax is one of the big sources of revenue for country that can give positive effects for economic development in Indonesia. So make sure we are not reluctant to pay taxes and prejudiced toward to the tax.
by: hari-lumos
