ADB and the Government of Switzerland Support Tax and Revenue Reforms in Indonesia

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The FINANCIAL — The Asian Development Bank (ADB) has signed a cofinancing agreement with Government of Switzerland to provide technical assistance (TA) to the Government of Indonesia to strengthen its tax administration, procedures, and policies to boost revenues and increase tax compliance rates.

The agreement was signed by ADB’s Head of Office of Cofinancing Operations, Rune Stroem, on behalf of ADB and Ambassador Beatrice Maser Mallor of the Swiss State Secretariat for Economic Affairs (SECO) on behalf of the Government of Switzerland, according to ADB.

“Urban local governments are in a good position to increase their revenues due to growth in their economy and population. This requires improvements in the regulatory framework and support for fiscal decentralization,” said Mr. Stroem.

As part of the cofinancing agreement, the Government of Switzerland will provide a $5 million grant to be administered by ADB. Under the TA, ADB will work together with Indonesia’s Ministry of Finance and five selected local governments to implement pilot projects to improve tax administration. The TA is part of ADB’s ongoing support to strengthen local governance, particularly in the area of revenue administration.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members — 48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.

 

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