Jakarta – Finance Minister Sri Mulyani Indrawati appointed on Friday her expert assistant Suryo Utomo as the new tax director-general, tasking him to make sure the country meets this year's revenue target, completes a brace of tax law revisions and continues reforming the tax office.
"The main focus is on achieving the tax revenue target... the pressure is on us," Sri Mulyani told Antara news agency.
The tax office has estimated a revenue shortfall of Rp 140 trillion ($10 billion) this year as taxes from overseas trade shrink in line with lower import and export activities.
The tax office still has the option to expand its tax base and pursue existing taxpayers to pay up undocumented tax arrears.
The government can now access bank information from global financial centers under the Automatic Exchange of Information (AEoI) pact.
But Sri Mulyani said President Joko "Jokowi" Widodo had asked the tax office meet its target without spooking businesses and investors too much. "This is a hard combination and will not be easy," Sri Mulyani said.
Suryo, 50, replaced Robert Pakpahan, who retired and left behind a massive homework in reforming tax administration and surveillance as part of an effort to increase Indonesia's tax base.
Suryo would need to find ways to increase tax revenues from digital economy, especially from e-commerce and on-demand content services that are headquartered overseas but have an extensive foothold in Indonesia.
Sri Mulyani said earlier that Indonesia would follow the footsteps of Singapore and Australia to tax Netflix, the California-based streaming service.
"International experiences and observations on the digital economy can be utilized to formulate a proper policy and set a fair tax without having to smother a sector that is still growing," Sri Mulyani said.
Suryo would also have to spearhead effort to revise the country's tax laws. Jokowi had promised to lower corporate income tax, which now sits at 25 percent, among the highest in Asia-Pacific.
Suryo started his career in the tax directorate general at the Finance Ministry in 1993, straight after graduating from Diponegoro Univesity in Semarang. He acquired his master's degree in business taxation from the University of Southern California in 1998.
Suryo held some key posts in the tax office, including leading its foreign direct investment and large taxpayers divisions. In the past four years, he served as Sri Mulyani's expert assistant in tax compliance.