Tax Ratio, Tax Capacity and Tax Effort in Indonesia Period 2001–2020

DOI

10.2991/978-2-38476-172-2_33How to use a DOI?

Keywords

tax ratio; tax capacity; tax effort

Abstract

Taxes are a very important source of state revenue in sustaining development. The size of the tax will determine the capacity of the state budget to finance state expenditures. Therefore, in order to get a large state revenue from the tax sector, a series of efforts are needed that can increase both the subject and the object of the existing tax. This study aims to analyze the magnitude of the tax ratio, tax capacity, and tax effort, in Indonesia for the period 2001–2020. The data used in this study is secondary data, sourced from: 1) Central Statistics Agency, 2) Bank Indonesia, 3) World Bank Website. The analytical methods used are: 1) Simple linear regression model, which is used to estimate the amount of tax capacity by treating per capita income as the independent variable and the tax ratio as the dependent variable, and 2) The approach to tax ratios, tax capacity, and tax effort. By comparing the amount of real tax with tax capacity, it will be obtained the amount of tax effort (E); is less than its capacity, more than its capacity, or equal to its capacity. The results of the study show that during the period 2001–2020, tax effort in Indonesia is still relatively low as indicated by the value of E which is smaller than one. Although during the period 2001–2020 real tax revenues continued to increase except in 2020, the real tax value was always lower than its capacity. Tax effort that are smaller than one indicate that there are still opportunities to continue to increase tax revenues.

Copyright

© 2023 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Edhi Taqwa
AU  - Rita Yunus
PY  - 2023
DA  - 2023/12/31
TI  - Tax Ratio, Tax Capacity and Tax Effort in Indonesia Period 2001–2020
BT  - Proceedings of the 2nd International Interdisciplinary Conference on Environmental Sciences and Sustainable Developments (IICESSD)  2022 Education and Green Economy (IICESSD EGE 2022)
PB  - Atlantis Press
SP  - 209
EP  - 214
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-172-2_33
DO  - 10.2991/978-2-38476-172-2_33
ID  - Taqwa2023
ER  -