Erry Firmansyah, former president of the Jakarta Stock Exchange, describes business and public responses to reforms in the Ministry of Finance, Tax Court, Securities and Exchange Commission, and Customs by the government of Indonesia. He says that, though it is not possible to eliminate all bribery or illegal payments, employees in the Ministry of Finance were acting professionally and focusing on making Indonesia’s markets more attractive and liquid for both local and foreign investors and surveillance of illegal financial activities. Taxpayers and businesses find that they are treated much more impartially and fairly as “customers,” he says. It is no longer assumed automatically that everyone is cheating on taxes. When there are disagreements, disputes can be taken to the Tax Court, which gained a reputation for being fair and impartial. He says these changes were the result of a new mindset brought about through a system of performance rewards, incentives and improved compensation of employees to more closely match the private sector. These reforms were reinforced by the Komisi Pemberantasan Korupsi, an agency that can arrest and prosecute both government officials and citizens for corrupt activities. In addition, he says, the budget process was reformed so that vendors and contractors found the system fairer and easier to work with. He says there still was room for improvement in the tax system because many small businesses were not registered and corrupt practices persisted. Some court procedures also needed to be improved, he says. Nonetheless, the country weathered the recent world economic recession fairly well because of these reforms and the increased trust of both local and foreign investors in the country’s improved financial integrity. He expects the reforms will be sustained for the foreseeable future.
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