Bisnis & Birokrasi Journal
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The Implementation of Advance Pricing Agreement in Indonesia Following The Adoption of Dispute Resolution Guideline
No full textAdvance Pricing Agreement (APA) is one of the fiscal instruments for minimizing transfer pricing disputes. In Indonesia, the regulation of APA was initially adopted in Income Tax Law year 2000 art 18(3a). Later, the implementation regulation was issued through Directorate General of Taxes Regulation, PER No. 69/PJ/2010. However, during that period the implementation of APA in Indonesia was still on very low progress. In 2015 Directorate General of Taxation (DGT) has not concluded to agree on any APA until the last revision of APA rule through Minister of Finance Regulation No 7/PMK.03/2015. This research utilizes a descriptive qualitative methodology where data is collected through a review of the literature and semi-structured in-depth interviews with key stakeholders. The result of this research shows that the development of APA implementation after the issuance of Minister of Finance Regulation No 7/PMK.03/2015 has increased. Based on statistics of APA in Indonesia after 2016 there was an increase in the APA submissions and the DGT has successfully concluded some APAs. The latest APA implementation in Indonesia has followed the dispute resolution guidelines as proposed by the Organization for Economic Cooperation and Development (OECD) through Base Erosion and Profit Shifting (BEPS) project as proposed in the Action Plan 14. However, there are issues pertaining to the implementation of APA such as transparency and certainty related to the APA process. Responding to these issues the DGT has made several attempts such as, improving human resources and strengthening the regulatory
Bridging the State and Society: Rethinking of Social Response and Disaster Risk Reduction during Uncertainties Future of Covid-19 in Indonesia
No full textThis study aimed to examine the social aspects of a disaster, in particular related to disaster risk reduction and social response, and to seek the references in adopting or adapting the best practices from a number of countries that have been able to control the Covid-19 spread. To get a comprehensive result, this study used a qualitative method with the data collected through desk studies sourced from the digitally accessed secondary data in the span of January to May 2020. The results of the study showed that unity of command in preparing a strategy of disaster risk reduction from the central government to local governments has become an absolute necessity to achieve a more coordinated and sustainable management effort. This pandemic at the same time becomes an alarming alert and wakeup call for the government to place subscriptions for disease outbreak as a priority agenda. In addition, strengthening the people-centered approach as the spearhead of disaster management must also be done to create a resilient and disciplined social behaviour and responsibility of the community. In the end, the government policy in improving the pandemic situation must be able to bridge public awareness to conform the health protocol as a joint commitment to prevent the new normal scheme not turning into a new disaster in future
A Structural and Mindset Bureaucratic Reform Agenda for Jokowi’s Second Term
No full textThis article analyzes bureaucratic reforms for the second period of Jokowi’s leadership—the last stage of the grand design for bureaucratic reform. This moment is the last chance for Jokowi to shows his commitment to good governance. However, there are things that cannot be denied, the experience of the last five years (2014-2019) of Jokowi's leadership still leaves a lot of homework that needs to be addressed. The bureaucracy performance is still low. The research design in this article uses descriptive research methods supported by a literature study approach that traces the actual secondary data as a study material. The results of this study predict the two aspects mentioned by Jokowi in the "Vision of Indonesia" speech, namely structural reform and mindset reform. Structural improvement is used to create a fast and agile bureaucracy in providing public services. And reforming the mindset can be done by adapting the mindset capacity in dynamic governance, which is to encourage bureaucrats to think ahead, think again, and think across to open opportunities to create productive, innovative and competitive bureaucracies
Understanding the Complex Relationship Between Good Governance and Economic Growth in Indonesia During the Reform Era
No full textEconomic growth in Indonesia had fluctuated during the reform era which began in 1998 due to the political condition of Indonesia. For many developing countries like Indonesia in this case, economic growth and governance becomes an interesting issue to be discussed. In one hand, scholars argue that practice of good governance principles as main requisites to accelerate national economic growth. Otherwise, scholars finds that few developing countries can promote national economic growth rapidly without implementing good governance practice at first. ,Case in Indonesia practice of good governance principles during the reformera shows increasing results. This study is conducted through literature review by using historical institutionalism analysis aimed to describe relationship economic growth and good governance throughout the Indonesian reform era. This paper finds that economic growth in Indonesia during the reform era was the result of a variety of independent factors, not a single factor
Centralized Local Development versus Localized Central Arrangement in Village Autonomy Policy Implementation in Indonesia
No full textAmidst fluctuate central-local governmental relations, extended decentralization policy to village level prompt discourses as to whether the policy could exploit local wisdom within which villages are supposedly develop. This article aims at explaining implications of centralized local development in Indonesia and which ways the village governments and communities exploit local wisdoms to implement localized central arrangement under the 2014 Village Law. A qualitative case study in two villages in two special autonomous provinces in Indonesia representing rich traditional culture-based tourism respectively is conducted. Data is gathered through semi-structured in-depth interviews with some key informants and document analyses. Following that, the article argues that reciprocal relations between local wisdom and practices of village autonomy are lacking, whereby organic and traditional values are not compatible with modern and formal bureaucratic nature of village governance. Village apparatuses has rather sought for satisfying local development accountability than incorporating existing local wisdom therein. While the 2014 Village Law requires each village to integrate local wisdom living naturally in villages, its standardized procedures render them to shift their accountability from supposedly held to local people to municipal governments. This makes centralization of local development happened by and within local governments under localized administrative arrangements imposed by the central government
A Review of Value Added Tax Policy on Animal Feed Industry in Indonesia
No full textThe role of tax policy is very important in efforts to increase business productivity, particularly through the provision of tax incentives in line with one of the principles in supply-side tax policy. However, studies to evaluate the Value Added Tax (VAT) policy implementation on animal feed using the supply-side tax policy perspective is very rare. This research is aimed at analyzing the impact of VAT incentives on animal feeds on the tax burden borne by the taxpayer both in carrying out their obligations and obtaining their rights or so called cost of taxation in Indonesia. The research uses qualitative approach with both qualitative and quantitative data. The data is collected through in-depth interview with eleven relevant informants, literature study, and secondary data. The study finds that (1) the policy raises the cost of taxation in the form of compliance cost, direct money cost, time cost and psychological cost for the animal feed industry, (2) the policy has a contra-productive effect to the effort of improving the national animal feed production capacity along with the cascading effect and opportunity cost arising from the policy implementation; and (3) the policy warrants a different impact for domestic animal feed producers and importers due to to the absence of the cascading effect. These findings highlight that the application of tax-incentive distribution of VAT on animal feed input materials disrupts the company’s cash flow and limits the production capacity for business actors since it is in contradiction to the supply-side tax policy principle. This study recommendsa re-regulation and de-regulation as an alternative to tackle the issues.  
Adopting BEPS Inclusive Framework in Indonesia:Taxation Issues and Challenges in a Digital Era
No full textThis research is intended to discuss the new framework of taxing a highly digitalized economy, known as Base Erosion and Profit Shifting (BEPS) Inclusive Framework. This research discusses challenges that will be faced by Indonesia while adopting that new framework into domestic jurisdiction despite its potential benefit for state revenue. Taxing a highly digitalized economy under the physical-presence concept has been considered obsolete and tends to encourage Multinational Enterprises to shift their profit into low tax jurisdiction. This research applies a qualitative approach and research method. The data collection was done through a literature review and expert interviews. Organization for Economic Cooperation and Development (OECD), with the support of G20 members, proposes the solution based on global consensus. The solution is to establish a nexus to allocate taxing rights and profit allocation to the market jurisdiction. Indonesia has formulated a domestic legal basis despite myriad challenges. The challenges include coverage of the establishment of technical legal implementing guidelines and the improvement of the tax authority to optimize its performance. Essentially, this study highlights the legislation and organizational capacity of the Indonesian context. The study finds the ability to establish the technical regulation is seems questionable and similarly to the organization's capability to implement the project
Competency Based State Civil Apparatus Structuring in The Framework of Bureaucracy Reform
No full textThe direction of bureaucratic reform currently rests on the application of professional state civil apparatus (ASN) management, one of which is through competency based ASN structuring. Appropriate ASN structuring based on competence (the right man in the right place) will bring a positive impact on organizational performance. However, the mismatch between employee competencies and position and placement is still a major problem for ASN. The policies related to existing employee structuring are less effective, so it is necessary to formulate a more adaptive ASN structuring policy that animates Law Number 5 of 2014 concerning ASN, and a competency based ASN structuring model is needed that is more comprehensive. This research was conducted at DLH East Java Province using qualitative methods through a descriptive approach. Data were obtained from observations, interviews and documentation studies which are then processed with an interactive data analysis model. The results showed that the implementation of ASN structuring in DLH East Java Province was still not optimal due to internal and external inhibiting factors. The recommended new model is a model that integrates instruments in structuring existing employees with new instruments such as competency testing and competency enhancement in accordance with the merit system and by involving the role of several stakeholders directly related to the implementation of the ASN structuring
Audit Opinion and Fraud in Local Government: Case of Indonesia
No full textThis paper aims to examine the relationship between government audit opinion and fraud in local government in Indonesia. We utilize logistic regression analysis to test the hypothesis using a sample of 28 local governments in West Java province in periods of the fiscal year 2012 to 2017. This study finds that audit opinion significantly affects the fraud. There is a strong relationship between audit opinion and fraud. Moreover, the unqualified opinion awarded by The Audit Board of the Republic of Indonesia (BPK RI) to local government represented the real condition of local governments in their good governance and accountability. This finding is also robust when we measure fraud by other proxies namely penalty and state-loss. This study provides a useful suggestion for state audit institution namely BPK RI regarding the importance of regular government auditing. Follow-up the audit recommendations play an important role in improving internal control effectiveness, accountability, governance, and transparency. This improvement will reduce the level of fraud in local governments. This study not only fills the gap of few literature on how to reduce fraud by considering the role of auditing but also measures the important role of government auditing in reducing and preventing fraud
Public Value Creation by Private Sector through Cross-Sector Collaboration: A Case Study of the Gojek Wirausaha Program
No full text Social reality that is always dynamic in practice often causes the "public" and "private" spheres to become increasingly difficult to separate. Several studies state that public value creation is no longer the exclusive domain of the government, the private sector can even carry out innovative ideas for community needs that are widely applied by the start-up industry. This research is a case study of the Gojek Wirausaha Program that intentions to help MSMEs 'upgrade' by providing business training and technology access through digital platforms. This article aims to determine how the private sector creates public value at the practical level in the context of a developing country. This study's contribution is the availability of new data in a different context from the majority of previous studies. It is expected to provide a better understanding of public value creation, mainly through cross-sector collaboration. The study uses five primary data collected through semi-structured interviews and a few secondary data by conducting literature reviews from documents, newspapers, mass media, and journal articles. The finding shows that the creation of public value in practice has its dynamics influenced by the interests of actors who, despite being private corporations, would like to create public value.