Indonesia’s presidential contenders promise tax reform to boost revenue

The three main candidates contesting Indonesia's presidential elections this month are proposing to bolster government coffers by creating a new tax collection agency, despite scepticism from the tax and business community. Policymakers in Southeast Asia's largest economy have long considered the creation of a more powerful tax institution to tackle the problem of chronically weak revenue collection, even as they have failed to address simpler solutions such as widening the tax base. Indonesia has managed its finances relatively well during President Joko Widodo's 10-year tenure, but its spending capacity is limited by a deficit ceiling, large outlays on energy subsidies and growing interest payments on debt.