{"type":"script","doc_desc":{"producers":[{"name":"Reproducibility WBG","abbr":"DIME","affiliation":"World Bank - Development Impact Department","role":"Verification and preparation of metadata"}],"prod_date":"2024-11-05","version":"1"},"project_desc":{"authoring_entity":[{"name":"Rong Qian","email":"rqian@worldbank.org","affiliation":"World Bank"},{"name":"Grzegorz Poniatowski","email":"grzegorz.poniatowski@syntesia.eu","affiliation":"Syntesia Policy & Economics"}],"title_statement":{"idno":"FR_IDN_2024_203","title":"Reproducibility package for Estimating Value Added Tax (VAT) and Corporate Income Tax (CIT) Gaps in Indonesia  "},"abstract":"Despite their subdued collection efficiency, VAT and CIT are the main sources of government revenue in Indonesia. The sources of the forgone revenue in VAT and CIT remained largely unknown. This paper aims to close this knowledge gap. It finds that the gaps in VAT and CIT accounted for 6.4 percent of GDP on average between 2016 and 2021. Overall, non-compliance had a larger impact on the tax gap\u2012contributing to 58 percent of total forgone notional revenue from these tax instruments. The compliance gaps are very high compared to international peers. They have increased considerably in 2020, likely caused by the economic consequences of the COVID-19 pandemic, resulting in higher incentives to evade and defer tax payments. Despite some decline observed in 2021, the compliance gaps remained elevated compared to the pre-pandemic period. The policy gaps are relatively smaller but also contributed to significant revenue loss. The policy gaps have declined because of the deflation of nominal thresholds, reducing the scope of concessions in the VAT and CIT systems for small and medium-size companies","geographic_units":[{"name":"Indonesia","code":"IDN","type":"Country"}],"acknowledgment_statement":"This paper is one of several background notes prepared in support of a World Bank flagship report on corporate taxation and Value Added Taxes in Indonesia. The paper was prepared by a World Bank team consisting of Rong Qian (Senior Economist) and Grzegorz Poniatowski (consultant), with contri-butions from Ratih Dwi Rahmadanti (Economist), Anthony Obeyesekere (Economist), Ahya Ihsan (Sen-ior Economist), and Dwi Endah Abriningrum (Research Analyst). The team would like to thank valuable comments from Rajiv Kumar (Senior Economist), Ralph Van Doorn (Senior Economist), Oyebola Okunogbe (Economist), and guidance from Habib Rab (Lead Economist) and Lars Moller (Practice Manager).\nThe authors would like to thank staff of the Ministry of Finance\u2019s Directorate General of Taxes, BKF, and Macroeconomic Policy Center for their valuable feedback. ","datasets":[{"note":"Source: Badan Pusat Statistik (BPS) - Statistics Indonesia\nLocated at: 1_use_tables_rescaling.xls, sheet 2016-2021","name":"Domestic Transactions at Basic Price ","access_type":"Publicly available and included in the reproducibility package","uri":"https:\/\/www.bps.go.id\/en\/statistics-table\/1\/MjExNiMx\/indonesian-input-output-table-domestic-transactions-at-basic-price--185-products---2016--million-rupiah-.html"},{"name":"Gross Domestic Product (GDP) by Expenditure","note":"Source: Badan Pusat Statistik (BPS) - Statistics Indonesia\nLocated at: 1_use_tables_rescaling.xls, sheet \"Expenditure\"","access_type":"Publicly available and included in the reproducibility package","uri":"https:\/\/www.bps.go.id\/en\/statistics-table\/2\/MTk1NSMy\/-2010-version--1--gdp-at-current-market-prices-by-expenditure--billion-rupiahs-.html"},{"name":"Value Added Tax (VAT) revenue data","uri":"https:\/\/www.bps.go.id\/en\/statistics-table\/2\/MTA3MCMy\/actual-government-revenues--billion-rupiahs-.html ","note":"Source: Badan Pusat Statistik (BPS) - Statistics Indonesia\nLocated at: 2_VAT_compliance_gap_model.xlsx, sheet \"Revenue\"","access_type":"Publicly available and included in the reproducibility package"},{"name":"GFCF (Gross Fixed Capital Formation) by Industrial Origin ","note":"Source: Badan Pusat Statistik (BPS) - Statistics Indonesia\nLocated at: 2_VAT_compliance_gap_model.xlsx, sheet \"GFCF\"","uri":"https:\/\/www.bps.go.id\/en\/statistics-table\/2\/MjA3NSMy\/gfcf-by-industrial-origin-and-24-types-of-asset--billion-rupiahs-.html","access_type":"Publicly available and included in the reproducibility package"},{"name":"Tax Expenditure Report ","note":"Source: Badan Kebijakan Fiskal\nLocated at: 2_VAT_compliance_gap_model.xlsx, sheet \"Other adjustments\"","access_type":"Publicly available and included in the reproducibility package","uri":"Source: https:\/\/fiskal.kemenkeu.go.id\/publikasi\/tax-expenditure-report"},{"uri":"https:\/\/www.bps.go.id\/en\/statistics-table\/2\/MTk1NSMy\/-2010-version--1--gdp-at-current-market-prices-by-expenditure--billion-rupiahs-.html","name":"GDP at Current Market Prices by Expenditure","access_type":"Publicly available and included in the reproducibility package","note":"Source: Badan Kebijakan Fiskal\nLocated at: 5_All_PGs.xlsx, sheet \"Figure 4.1\""},{"name":"Financial Corporation \u2013 Sectoral Accounts and Balance Sheets ","uri":"https:\/\/www.bps.go.id\/en\/statistics-table\/1\/MjE4MyMx\/financial-corporation---sectoral-accounts-and-balance-sheets--trillions-rupiah---2016---2022.html","note":"Source: Badan Pusat Statistik (BPS) - Statistics Indonesia\nLocated at: 6_CIT_gaps_model.xlsx, sheet \"1_Summary - actual liability\", \"2_Summary - potential\", \"3_Summary - final regime\", \"4_Summary - public and SMEs\"","access_type":"Publicly available and included in the reproducibility package"},{"name":"Non-Financial Corporation \u2013 Sectoral Accounts and Balance Sheets","uri":"https:\/\/www.bps.go.id\/en\/statistics-table\/1\/MjE4MiMx\/non-financial-corporation---sectoral-accounts-and-balance-sheets--trillions-rupiah---2016---2022.html","access_type":"Publicly available and included in the reproducibility package","note":"Source: Badan Pusat Statistik (BPS) - Statistics Indonesia\nLocated at: 6_CIT_gaps_model.xlsx, sheet \"1_Summary - actual liability\", \"2_Summary - potential\", \"3_Summary - final regime\", \"4_Summary - public and SMEs\""},{"name":"World Bank Enterprise Survey Report (2023)","note":"Source: World Bank Enterprise Survey \nLocated at: 6_CIT_gaps_model.xlsx, sheet \"Figure 4.\nFigure 4 uses data from this report and restricted administrative data from the Ministry of Finance. Therefore, the figure values are restricted and not included in the package.\n","access_type":"Publicly available but not included in the reproducibility package.","uri":"https:\/\/www.enterprisesurveys.org\/content\/dam\/enterprisesurveys\/documents\/country\/Indonesia-2023.pdf"},{"name":"Administrative Tax data","note":"Source: Ministry of Finance\u2019s Directorate General of Taxes, Bundes Finanz Ministerium (BKF) \nLocated at: 6_CIT_gaps_model.xlsx, sheet \"Figure 4.\n","access_type":"Restricted and not included in the package."},{"name":"Corporate Income Tax (CIT) Revenue data","note":"Source: Ministry of Finance\u2019s Directorate General of Taxes, Bundes Finanz Ministerium (BKF) \nLocated at: CIT revenue.xlsx, Confidential input for CIT calculation.xlsx, Social transfers in kind.xlsx","access_type":"Restricted and not included in the package."}],"software":[{"name":"Excel ","version":"Microsoft Excel for Microsoft 365 MSO"}],"scripts":[{"file_name":"FR_IDN_2024_203","zip_package":"FR_IDN_2024_203.zip","title":"Reproducibility package (partial data and instructions) for Estimating Value Added Tax (VAT) and Corporate Income Tax (CIT) Gaps in Indonesia","date":"2024-11","dependencies":"The reproducibility package does not use external dependencies","notes":"Computational reproducibility verified by the Development Impact (DIME) Analytics team, World Bank."}],"output":[{"type":"World Bank Reports & Flagships","title":"Estimating Value Added Tax (VAT) and Corporate Income Tax (CIT) Gaps in Indonesia  ","authors":"Rong Qian, Grzegorz Poniatowski","uri":"http:\/\/documents.worldbank.org\/curated\/en\/099030225225027356"}],"data_statement":"Some data is restricted and has not been included in the reproducibility package.","reproduction_instructions":"To successfully replicate the analysis provided in this package, users should follow the instructions in the README file and replicate the analysis using the Excel sheets. Some data is restricted, so users will not be able to verify CIT revenue values for Figures 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, and 4.2. All restricted data values are highlighted in red for reference","technology_environment":"Paper exhibits were reproduced in a computer with the following specifications:\n\u2022 OS: Windows 10 Enterprise\n\u2022 Processor: Intel(R) Xeon(R) Gold 6226R CPU @ 2.90GHz 2.90 GHz (2 processors)\n\u2022 Memory available: 32 GB\n\u2022 Software version: Microsoft Excel for Microsoft 365 MSO","disclaimer":"The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development\/the World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.","license":[{"name":"Modified BSD3","uri":"https:\/\/opensource.org\/license\/bsd-3-clause\/"}],"contacts":[{"name":"Rong Qian","affiliation":"World Bank","email":"rqian@worldbank.org"},{"name":"Reproducibility WBG","affiliation":"World Bank","email":"reproducibility@worldbank.org"}],"language":[{"name":"English","code":"EN"}],"production_date":"2024-11"},"tags":[{"tag":"Open code"},{"tag":"Restricted data"}],"schematype":"script"}