Paying Taxes for Development Purpose

Paying Taxes for Development Purpose

 

Recently, the issue of economic growth is very strategic because it is associated with the people’s welfare. Foreign countries are the ones which have a very important role in the domestic economic growth in addition to other factors, judging from the economic activities namely: domestic and foreign exports and imports, direct investment into Indonesia. These macroeconomic activities are essential, not only to improve domestic economic products but also, in particular, to increase employment opportunities which are growing (Nugroho,RE,2017).

Economic growth is one very important indicators in assessing economic performance, especially to conduct an analysis of the economic development of a country or a regional authority. Economy is experience growth if the production of goods and services increases from the previous year. Thus, economic growth indicates the extent to which economic activity can generate additional income or welfare for a given period of time. Income taxes from growing society may affect the government's revenue from the tax sector (Nugroho,RE, 2017).

Indonesia is one of the developing countries, sufficient funds required every year to carry out various kinds of development. The greater the government spending in development, the greater the acceptance that must be obtained. Source of state revenue there are 2 (two) namely domestic receipts and foreign loans. Source State income originating from within the country is divided into 3 (three) namely: non-tax state revenues (PNBP), tax revenues, and grants. 

The tax revenue sector is one of the main sources to rely on government in financing development and other expenses.Santika (2014) says that tax is a potential wealth that can be owned by every region and almost all regions in Indonesia explore the potential local income by collecting taxes Since the tax reform was carried out with the issuance of the new tax law of 1983, the tax system changed from office assessment to self assessment (for example for Income Tax and Value Added Tax). With this new system, taxpayers have rights and obligations both in calculating, paying, and self-report the amount of tax. 

This will be done properly when obliged to follow the appropriate tax regulations applicable law. From the government's point of view, Tax is one of the important sources of revenue used as financing and state development. If the expected tax does not match expectations, then the process of financing state expenditures and the process of spending for development will be hampered. Economic growth is an indicator used to see the success of development, in the development in question can overcome the level of poverty (Siregar & Wahyuniarti, 2008). 

Economic growth is a measurement an achievement of the development of an economy (Supartoyo, Tatuh, & Sendouw,2013). Funds from tax revenues as the main source of APBN allocated to fund the various interests of the nation for prosperity of the people, starting from the agricultural sector, industry, banking, health as well as education. The greater the amount of tax received, the more profitable for the country (Alim, 2005) An economy is said to experience growth or development if the level of economic activity achieved is higher than previous time.

Factors influencing economic growth, namely:

a. Land and other natural resources.

b. Number and quality of population and workforce.