Indonesia pushes for more electronic transactions

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Bank Indonesia governor Perry Warjiyo said the central bank was aiming at digitalising vehicle taxes, regional levies, as well as restaurant and hotel taxes this year. BANK INDONESIA

Bank Indonesia (BI) is continuing to accelerate electronic transactions as they will provide a source of income and strengthen financial infrastructure within regional governments, its governor Perry Warjiyo has said.

Perry said the central bank was aiming at digitalising vehicle taxes, regional levies, as well as restaurant and hotel taxes this year after it successfully digitalised payroll for regional government officials at the provincial, city administration and regency levels.

 

“Regional [governments’] capability in managing the economy is key. With electronification, income rises and spending is accompanied by an increase in capacity in handling expenses and promoting growth,” Perry said at the Office of the Coordinating Economic Minister on Thursday.

Electronic transactions have contributed to an increase in regional government’s revenue by a significant margin.

In Sleman regency, Yogyakarta, the local government’s income grew five-fold in the last four years. Other regional governments have also seen drastic growth, including Banyuwangi regency in East Java and the Jakarta administration.

BI has also been pushing through electronification for payroll within region-owned enterprises, reaching 31 provinces, 84 cities and 291 regencies thus far.

Besides creating efficiency within the regional government payment system, the push for digitalisation has resulted in faster public services, increased transparency and has prevented “leakages”, Perry said, noting some of its benefits.

Apart from that, BI is working closely with other ministries to support their programmes.

 

Last year, it supported the Ministry of Finance in digitalising the government’s social assistance programme, among others. It helped the Cooperatives and Small and Medium Enterprises Ministry in establishing digital payments to assist the growth of small and medium enterprises.

Minister of Finance Sri Mulyani Indrawati said on Thursday that the signing of a memorandum of understanding on the acceleration of the electronification of regional government transactions (ETP) was designed to increase the quality of financial management, in line with the principles of good corporate governance.

“We are hoping the ETP, by employing automatic payments, will be able to automate tax [payments] and bring about improvements in our tax collection,” Perry said.

THE JAKARTA POST/ASIA NEWS NETWORK