Tax has always been a controversial issue, mostly due to its nature as an “enforced, compulsory contribution” of which the citizens as taxpayers wouldn’t directly experience the benefits. People tends to agree with things that they knew what it would be used for and what it would bring them – taxes are not it, hence the reluctance to pay. The establishment of numerous sanctions also didn’t help in building a good impression among the citizens as they felt forced to comply if they don’t want to be punished. However, tax is crucial to the economic stability of a country. Not only because it serves as the biggest supplier of state revenue, but also because of its indirect influence on the economic cycle.
In 2023, Ministry of Finance publicized that Indonesia had recorded a total of 688,15 trillion rupiahs in revenue from tax and another 94,50 trillion rupiahs in revenue from customs and excise[1]. A rather huge sum of money, sure, but where did it goes? Many would wonder. The textbook says, it went to fund our country’s development. Which development exactly? Why we don’t see it? Why don’t we seem to benefit from it? All of the unknowns heed more suspicion and resistance. But many would often forget the words “without direct benefits” that entails the description of tax in Article 1 section 1 of General Provisions and Tax Procedures Law[2]. Those string of words mean literally no benefit would be felt directly by individual taxpayers as the tax were used to supply funds in order to further development in the country for the benefits of all citizens. The benefits were given through construction of public facilities such as roads, bridges, bus stops, state schools, state hospitals, and much more. We might not receive monetary benefits or direct convenience as a result of our tax compliance, but we receive long-lasting access to public facilities that would help us get by day by bay.
Then does the tax we pay only end up funding public facilities? What if the facilities were broken, overcrowded or simply not built at all? Won’t that be our loss? Not really. As said earlier, tax serves not only as the biggest supplier of state revenue, but it also held a crucial role in economic cycle. In economic cycle, tax serves as a mean of stability through tax policies. In case of a low-tide in the economic cycle, the government utilizes tax policies to give more leeway to business owners through incentives or funding in order to survive and maintain their business operations. For example, when our economy was hit hard by Covid-19 pandemic from 2019 to 2021, the government lowered tax rates, extending the deadline for filing income taxes, shouldering the burden of income tax for individual, and much more[3]. These actions help businesses to maintain their operations with minimal burdens as they pay lower taxes. As a result, we are able to power-through the crisis and start to recover our economy. Hence, tax also does help in maintaining economic stability of a country.
As far as we’d concerned, tax is another way to defraud our hard-earned money. We feel trapped by the sanctions imposed upon us if we were to disobey. We feel this way because we had yet to experience the “joy” paying taxes would bring us. We thought paying taxes were just a scam and if not for its enforced nature, we would rather not pay. We thought that sanctions exist to bane us. But every single thing in this world has two sides – taxes might decrease our take home income for a time, but the benefits supplied by tax are long-lasting. For example, public facilities such as roads, bridges, schools, bus stops and many other constructions are the indirect products of tax. As we paid taxes, the money was allocated according to the state budget plans and went to funds the constructions.
Tax also help as a mean of stability in which tax regulates the economy through tax policies. If the economy was low, tax policies would be relaxed in order to give a chance for business owners to breathe. If the economy was high, tax policies would be tightened in order to prevent inflation and help supply the state revenue for the sake of another development agenda or even for rainy funds in case of another – God forbids – economic disaster. All that we pay comes back in the end. That’s the “joy” of tax. And in fact, if we thoroughly understood the importance of tax and abide by the laws, those sanctions would not pose any threat to us. It would only serve as a reminder and control to deter from refusal to comply, not a tool to scare and threaten. The meaning of a word is up to the perception of those who read or heard of it – if you see tax in negative light then it’s an unpleasant scam, but if you see otherwise, it’s a perfectly normal social norm of giving and taking. Tax took a portion of our income not as a mean of extortion, but as an investment for the betterment of our future.
REFERENCES
[1] Ministry of Finance of Indonesia. (2023). APBN Kita : Kinerja & Fakta. Retrieved from APBNKITA-Mei-23.pdf (kemenkeu.go.id)
[2] Harmonization of Tax Laws. (2021). Retrieved from UU No. 7 Tahun 2021 tentang Harmonisasi Peraturan Perpajakan [JDIH BPK RI]