This publication critiques Indonesia’s regressive tax practices, warning that excessive reliance on consumption taxes harms lower-income groups. It documents a declining tax-to-GDP ratio and growing dependency on VAT, portraying the current system as one that “hunts easy targets” instead of equitably taxing wealth and rent sectors. The authors propose reforms through progressive instruments, such as a carbon tax, digital economy levy, and inheritance and property taxes, aligning revenue collection with fairness and sustainability principles.
The study argues that true fiscal justice requires a reorientation from extractive to restorative taxation. It also quantifies potential gains from wealth and carbon taxes, demonstrating that Indonesia can raise significant revenue without burdening the poor. CELIOS calls for transparent tax administration and a “people-first” fiscal approach to support equitable development and environmental accountability.
Bibliography:
Darmawan, J., Askar, M. W., Muhammad, G. D., Fikri, B., & Muhammad, B. (2025). Dear State Officials: Stop Taxing Like Hunting in a Zoo. Center of Economic and Law Studies (CELIOS).