Strengthening the effectiveness of public finances in Indonesia

ongoing

AFD supports the Indonesian fiscal and budgetary reform through a three-tranche development policy loan. The objective of this reform is to increase Indonesia’s tax potential by broadening the tax base, easing administrative complexity, reducing economic distortions and simplifying tax structures.The program aims at:Pillar A – Improving the composition of spending, budget execution and efficiency of spendingPillar B – Increasing tax administration efficiency, compliance management and audit capability, and reducing the cost of paying taxesPillar C – Increasing revenue potential and economic efficiency of tax policy.In addition, AFD mobilises specific grants for Technical Assistance program aiming at strengthening the capacity of the Indonesian Ministry of Finance and promoting peer to peer exchanges with the French tax administrations. The program, implemented by Expertise France, deals with key issues: taxation of the digital economy, climate fiscal policy, development of VAT and indirect taxation and international taxation policies.