Twist and Turns of Tax Rate War: Is It Really Beneficial for Indonesia's Economic Stabilization?

Tax Rate War (TRW) refers to the phenomena where countries lower their tax rates in order to attract investments into the country, in some cases this can also be referred as a tax reformation. Consequently, the investments mentioned will be able to step up the country's economic growth rate. In truth, TRW touches upon two functions of tax which are the function to be used as a budget and the function to stabilize the country's economy. However, the main focus of this article lies on the function to stabilize where it is hoped that TRW can stabilize the country's economic through the entry of investments. Though this phenomenon poses a positive outlook on Indonesia's economy, yet globally, this could also pose a threat to countries with high tax rates. This is reaffirmed by Indonesia's Minister of Finance (MoF), Sri Mulyani, in which she stated that other country's MoF are asked to refrain from raising to the bottom in terms of tax level, this anticipation is done to avoid a tax war between countries.