President of the World Bank Group Jim Yong Kim. (Photo: EPA/VNA) Jakarta (VNA) – President of the World Bank Group, Jim Yong Kim, has expressed his support to the Indonesian government’s plan on tax reform in an effort to increase the state budget, reported the country’s Antara News Agency on July 25.
Speaking at the Indonesia Infrastructure Finance Forum in Jakarta on July 24, he said the enforcement of the tax reform would be challenging but it is crucial to contribute to the infrastructure development of the country.
He suggested that Indonesia should double its infrastructure investment to 500 billion USD in the next five years.
Kim went on to say that in spite of its large potential, Indonesia’s tax revenue only amounted to less than 50 percent against the Gross Domestic Product (GDP), lower than that of the Philippines and Cambodia which shared similar problems as Indonesia.
Therefore, any attempts to reform the country’s tariff system should be supported in order to ensure the finance for infrastructure development.
Besides the lack of tax revenues, the country’s growth was also hindered due to inefficient public spending and the budget deficit that has been kept around 3 percent of the GDP.-VNA
VNA
