Boosting tax administration in Indonesia doubles revenue from top firms!
Tax administration improvements in Indonesia led to a significant increase in tax revenue from top firms. By increasing staff-to-taxpayer ratios, revenue more than doubled over six years. Additionally, adjusting corporate tax rates showed that the revenue-maximizing rate is almost double the current rate. The increased revenue from better tax administration is equivalent to raising the marginal corporate tax rate by about 23 percentage points. This suggests that improving tax administration can greatly benefit developing country governments.