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Report: Exposing illicit financial flows in Indonesia, the potential and the scale of tax revenue loss from the top six export commodities

12 November 2019 by Herni Ramdlaningrum, Dwi Rahayu Ningrum, Rahmanda Muhammad Thaariq and Widya Kartika (The Prakarsa) (Report produced by former Money Trail training participants)

 From 1989 to 2017, illicit financial inflows (by over-invoicing) from the top six export commodities (coal, copper, palm oil, rubber, coffee, and crustaceans) reached to USD 101.49 billion. Meanwhile, illicit financial outflows (by under-invoicing) reached USD 40.58 billion. Based on the illicit financial inflow and outflow, the potential loss of tax revenue in Indonesia during that period reached USD 11.1 billion. Of which the coal sector was the largest contributor with USD 5.32 billion. One of Prakarsa’s policy recommendations states that the government should carefully review, whether its trade incentives create loopholes which can be used to avoid tax, especially for commodities with strategic value for the Indonesian economy.


Please find the policy brief and full report here.