World Bank Suggests Tax and Subsidy Reforms to Improve Public Spending in Indonesia

In its “Indonesia Public Expenditure Review” report published on the 22nd of June 2020, the World Bank (WB) has urged Indonesia to consider carrying out tax and subsidy reforms in order to improve the quality of its public spending. The WB considers the fact that Indonesia has limited space for development spending due to low revenue and systemic constraints across sectors  along with inadequate data as well as information systems.

Senior Economist at the WB, Ralph van Doorn, stated that Indonesia's subsidy reforms and increased investment on housing, health and social assistance as well as public spending remained insufficient, despite strong economic growth. Doorn also noted that Indonesia’s spending...