JakartaPost-Feb 20, 2023

Indonesia has been losing about Rp 7.3 trillion (US$480 million) annually over the last decade through illicit financial flows (IFF), such as tax evasion and theft within the coal and fishery sectors. The sum was more than what the country received in development aid, as the latest Prakarsa study has shown. The estimate in the IFF on Fishery and Coal Trade 100-page report is the most comprehensive for Indonesia’s two mis-invoicing commodities. Using the Gross Export Reversal method, it compares the recorded trade value by Indonesia with all the partner countries in the fishery and coal sectors during the last 10 years. The losses also stemmed from underreporting and cost and profit shifting to tax havens. In this case, most companies act as traders who live in countries with more efficient tax rates and even tax havens. The report notes Indonesia’s illicit value of $14.5 billion per year for only these two commodities and calls Indonesia a “benefactor of natural resources to the world,” echoing economists’ observations that an actively developing Indonesia is one of the highest natural resources net capital exporters because of this trend. Read more at: https://www.thejakartapost.com/paper/2023/02/20/indonesia-facing-a-huge-loss-in-its-fishery-and-coal-trade.html.