Electronic invoicing could cut tax losses in international trade

The comprehensive study conducted by Perkumpulan Prakarsa research organization, as quoted on the opinion page of this newspaper on Feb. 20, is yet another illustration of the urgent need for the government to implement electronic invoicing in Indonesia’s international trade.

By comparing United Nations Comtrade data on Indonesia’s imports and exports, as reported by Statistics Indonesia, with the same data reported by our trading partners, huge discrepancies have been revealed in just two commodities alone: fish and coal. By calculating the loss that these discrepancies have caused for value added tax (VAT), royalties and income taxes it has been shown that Indonesia lost a total of US$5.6 billion of tax revenue during the period 2012-2022, of which $3.8 billion was due to unpaid royalties on coal exports.

Indonesia’s trade statistics are derived from Customs data, which in turn relies on paper invoices and self-declarations made by Indonesian importers and exporters. Misreporting and mis-invoicing by traders should always be anticipated, as they will often try to avoid paying tax and duties as well as avoiding administrative regulations and currency controls.

Source : thejakartapost.com/ For More Details

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