According to Global Financial Integrity’ study, Indonesia ranked as the seventh place in terms of illicit financial flows, reaching US$ 1878.8 billion or 2,254 trillion rupiah for the last ten years.
“The reasons behind that “achievement” are tax evasion and tax avoidance, including the extractive sector,” said Wiko Saputra, one of the speakers in the training on tax analysis in the extractive sector held by Prakarsa collaborated with Publish What You Pay (PWYP) Indonesia, supported by TIFA Foundation on 9-10 April 2015 in Sentul, Bogor.
As the main agenda, Wiko explained the method developed by GFI to analyze illicit financial flows in Indonesia. By utilizing the method, it showed that the biggest trend of illicit financial flows for fiscal year 2003-2013 found in the oil, gas, and mining sector. Beside illicit financial flows, the participant also equipped with deeper information and knowledge on extractive tax, calculation formula, and the case study covering the implementation of Extractive Industries Transparency Initiative (EITI), extractive revenue (tax and non-tax), tax evasion on palm oil sector.
Maryati Abdullah, National Coordinator of PWYP Indonesia highlighted, “Information transparency on cost recovery, production data, export-import data, lifting and etc. is mandatory to prevent potential lost revenue from extractive sector. So far, those information are sealed, so that utilized by oil, gas and mining mafia to conduct tax evasion as well as tax avoidance.”
It is agreed that only few who have been concerned on tax issues in the extractive sector. Therefore, CSO’s active role is needed to act as watchdog in tax monitoring tax, particularly for extractive sector. Not to mention the fact that extractive industries sector placed as the most corrupt sector according to study conducted by OECD.
Indeed, this training is part of capacity building for CSOs incorporated in Tax Justice Forum. Additionally, it is also an attempt to encourage CSOs to play more crucial role in tax advocacy as well as to improve their advocacy tools in promoting good governance in the extractive sector.