Source: Australian Tax Forum Journal Article
Published Date: 1 Dec 2012
This article reports the results of the first research on the compliance costs of large corporate taxpayers in Indonesia in 2010. Using a mail survey of 3,000 questionnaires with a response rate of 8.2%, the main finding is that the gross costs of compliance for large taxpayers are significant, estimated to be IDR 12.3 trillion, and account for 3.16% of tax revenue for large corporations and 0.19% of the Gross Domestic Product in 2010. Overall average costs per large company are IDR420,933, 442 (around A$55,000 at the December 2010 exchange rate). Average costs differ markedly across the various economic sectors. The majority of the costs are incurred on human resources in the companies (staff, managers, directors).
The research shows that costs are regressive in terms of the number of employees, the amount of total assets, the annual turnover, and the tax payments. The components of compliance costs are broken down into: routine and non-routine costs 86% and 14%, internal and external costs 73% and 27%, computational costs and planning costs 73% and 27%, respectively. Cash flow benefits and tax deductibility benefits, both being offsets of gross costs, represent 24% and 25% of gross compliance costs respectively.
The article concludes by succinctly setting this timely research in an international context, identifying its limitations and discussing the study’s significance for Indonesian tax policy, with a recommendation for further work in the tax compliance costs field.
More by Jeff Pope
Estimating the compliance costs of Australia's carbon pricing scheme - Journal 01 Apr 2014
Why the tax compliance costs of large companies in Indonesia are low compared to other countries: Empirical evidence - Journal 01 Apr 2014
The economic costs of taxation: An assessment of the Henry Tax Review - Journal 01 Mar 2011
The role of religiosity in tax morale and tax compliance - Journal 01 Dec 2010
The compliance costs of Australia's emissions trading scheme: An exploratory analysis - Journal 01 Nov 2009
Improving opportunities and equity in home ownership through the tax system - Journal 01 Dec 2008
The effects of the self-assessment system on the tax compliance costs of small and medium enterprises in Malaysia - Journal 01 Sep 2008
Personal income tax reform: consensus, outliers, specifics and some sensitive issues - Journal 01 Jul 2007
The Compliance Costs of the Superannuation Surcharge Tax - Journal 01 Oct 2003
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
Already a Subscriber? Login now
Details
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
("TTI")
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.
Tags