Indonesia has been started transformation of tax policy in this year. After Tax Amnesty program, Indonesia made new regulation for prevent tax avoidance and increase tax compliance of taxpayer in transfer pricing, controlled foreign company and treaty shopping with these regulation:

1. Regulation Of The Finance Minister Of The Republic Of Indonesia Number 213/PMK.03/2016 Concerning Type Of Documents And/Or Additional Information Which Must Be Advised By Taxpayer That Doing Transaction With Related Party And The Procedures Of Management.
2. Regulation Of The Finance Minister Of The Republic Of Indonesia Number 70/PMK.03/2017 Concerning Technical Guide for Financial Information Access to Tax Interests.
3. Regulation Of Director General of Taxes Number 10/PJ/2017 Concerning Procedures For The Application Of Double Taxation Provisions.
4. Regulation Of The Finance Minister Of The Republic Of Indonesia Number 107/PMK.03/2017 Concerning The Determination of Dividend and the Calculation of the Calculation by Domestic Taxpayer on Capital Participation in Overseas Enterprises Other than Business Entities Selling Stock in the Stock Exchange, as we known as CFC Rules.
5. Circular Letter Number 20/PJ/2017 Concerning Monitoring Taxpayer After Tax Amnesty Period.

According to all the new regulation, Indonesia has been used the performance of the regulation to increase the extra effort of Directorate General of Tax. Tax revenue of Indonesia’s state is the main point of the extra effort. The government using implementation all of new regulation that enacted recently for fulfill the target.

Automatic Exchange of Information is one of the regulation that can be support tax amnesty for assests declaration. It will be one system to increase compliance of taxpayer in Indonesia that the most of rich people in Indonesia invest or save their current and non current assets overseas. Thus, the income of Indonesia’s Taxpayers can be taxable in Indonesia. The reasons of the non compliance system of taxpayers always related to the tax tariff in Indonesia. Meanwhile the comparison of the tax tariff in Indonesia and the other country is sufficient significant. For example is tax tariff in ASEAN country, Indonesia is the one that have high tax tariff than the other country, such as Singapore, Thailand and Hongkong.

In the classical bureaucrat, without contraprestation to the taxpayers which paying tax, here some factor the taxpayers don’t want to pay tax to the government:

1. Untrusted to the government to manage money in Indonesia, for example because of influence of negative news that taxpayers listen from media (TV, radio or newspaper) about the civil servant that do corruption, thus taxpayers don’t trust to government in Indonesia for manage country’s finance.
2. Non-Contraprestation for taxpayers and nothing benefit that taxpayers can get from pay tax to the country. No direct reward for the taxpayers is according to The Law of The Republic of Indonesia Concerning General Provisions and Procedures of Taxation Article 1 point 1 “Tax is compulsory contribution to the state which owed by an individual or corporate that is forced by Law, with no direct reward, and used for state purposes for the maximum prosperity to the peoples.” This article explain about the taxpayers didn’t get direct reward if paying tax.
3. The rules of thinking of taxpayers, for example is when the taxpayer hear or know about multinational firm that play any method to don’t paying tax with the actual amount (like do tax avoidance and tax evasion), the other local business firm can thinking that avoid paying tax is an unusual thing and it can be influence their tax compliance.