Domestic Resource Mobilization Program, Subprogram 1

approved

The proposed program will enhance the government's ability to mobilize sufficient domestic resources to finance planned public expenditures on service delivery and public infrastructure upgrading. Through an integrated approach, the program will support (i) tax administration strengthening, (ii) international tax cooperation and exchange of information enhancement, and (iii) revenue policy improvement. The proposed program is consistent with the Government of Indonesia's National Medium-Term Development Plan (RPJMN), 20202024, which sets out to support inclusive, competitive, and environmentally sustainable growth in the country and prioritizes enhanced domestic resource mobilization (DRM) as a means of financing development.a The proposed program is also aligned with the Asian Development Bank (ADB) country partnership strategy for Indonesia, 20202024, which focuses on (i) improving the well-being of citizens, by strengthening health care, education, and social security; (ii) accelerating economic recovery, by supporting structural economic reforms, including domestic resource mobilization; and (iii) strengthening resilience, including climate change mitigation and adaptation measures, environmental sustainability, and green recovery.b The proposed program contributes to four operational priorities (OPs) of ADB's Strategy 2030: addressing remaining poverty and reducing inequality (OP1), accelerating progress in gender equality (OP2); tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability (OP3); and strengthening governance and institutional capacity (OP6).c Subprogram 1 objectives are aligned with the goals of the Paris Agreement, by building the enabling environment to secure resources for climate change, including through carbon taxes.