sharing in governance of extractive industries

Illicit Financial Flows and Tax Crime in Mining Sector in Indonesia

Recently, Publish What You Pay Indonesia conducted study on Illicit Financial Flows (IFF) and tax crime in mining sector in Indonesia. We see the urgency of this issue, given the fact that Indonesia is among top seven developing countries with highest IFF according to Global Financial Integrity Report in 2014.

Based on our calculation, the estimation of IFF in Indonesia in 2014 reach IDR 227.7 trillion or equal to 11.7% of revised state budget (APBN-P) for 2014. Mining sector contributes more than 10% of total IFF which is around IDR 23.89 trillion. Around IDR 21.33 trillion comes from trade misinvoicing and IDR 2.56 trillion comes from hot money narrow. We also find the unsurprisingly low tax ratio of mining sector in 2013, which only reach 9.4%. This low number is closely related to the rampant practices of tax evasion and tax avoidance.

To read our full report, please kindly check the link below

http://pwyp-indonesia.org/en/83709/illicit-financial-flows-and-tax-... .


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