JakartaPost-Sept 14
Indonesia is believed to be losing around one-tenth of would-be corporate tax revenue as companies reduce tax bills by shifting profits overseas. Based on a recently published study, the state is estimated to have been deprived of at least US$2.47 billion in income as companies shifted more than $9.88 billion worth of profits to tax havens in 2018. Equivalent to 11 percent of the country’s corporate tax revenue, that was a shade above the global average loss of 10 percent, the researchers found. The amount of profits shifted to tax havens reportedly increased from around $7 billion in 2016 to almost $10 billion in 2018, causing deeper losses in tax revenue over time. Singapore, Hong Kong, Bermuda, Caribbean islands and other tax havens are believed to be the main beneficiaries, followed by Switzerland and European Union tax havens, according to the researchers from the University of California at Berkeley and the University of Copenhagen, who published their findings on the website missingprofits.world. According to a report published by the Tax Justice Network NGO in November 2020, the republic is missing out on more than $4.8 billion a year due in tax from corporations and high net worth individuals because of tax havens. That number was equivalent to 42.92 percent of the healthcare budget or 14.09 percent of education spending, said the report, pointing to a chronic problem in the national tax system. Read more at: https://www.thejakartapost.com/news/2021/09/14/govt-deprived-of-billions-of-dollars-in-tax-income-as-firms-shift-profits-abroad.html.
