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Such as Death, Tax is Inevitable

In 1789, Benjamin Franklin stated: 'in this world nothing can be certain except
death and taxes'. That statement represent that tax is inevitable in everyone live. Beside
the inevitability of taxes, like death, taxes is simply not fair and complicated, therefore
tax become an emotive issue in every country in the world, not to be exception in
Indonesia. The simplicity of tax regulations not as simple as the inverse of tax
complexity. Tax simplicity means that the regulation is easy enough to interpret and
apply, fair enough, and lower cost to apply. Therefore simplicity of tax regulations can
be another way to achieve tax compliance.
The simplicity of tax regulations may become one of the solution of tax
compliance in Indonesia, because the taxpayer diversity in educational background
need one regulation that easy enough to interpret and apply by the lowest
educational background of taxpayer. For example, DJP as the Indonesian Tax
Authority, issued a regulation that facilitate small business taxpayer trough simplify the
regulation by finalized the rate with PP 46. This regulation increase tax compliance at
the small business taxpayers.
Tax simplicity also means tax fairness. With a complex tax regulation, taxpayers
tend to be wrong to calculate their tax. The ability of tax sheltering is proportional to the
size of taxpayer business. Therefore, the more sophisticated preparation of tax report
tend to pay less than simple tax report preparation. Its mean that the larger income
taxpayer will pay taxes less than a small business taxpayer and the complex tax
regulation become unfair.
The other reason that tax regulations have to be simple is the cost of tax
compliance. The cost of complying with regulations set by the government is high. For
one taxpayer may need more than one day of their business day to prepare the tax
report, on the other hand, for the big company, they may need several tax consultants,
lawyers, accountants and other resources. Considering the rate of those resource can
be higher than the tax rate in several cases. That can be eliminated with the
implementation of a simple tax regulations.
The complexity of tax regulations can be the trigger of tax avoidance. The more
complex the regulation tend to make more taxpayer consider to avoid tax because of
several reasons. Sometimes, simplicity can be one of many solution to increase tax
compliance. Simplicity of tax regulation doesnt always mean the inverse of tax
complexity. It means the regulations have to be easy to understand an implement,
fairness between various attempt to avoid, and not so costly to comply. Because of that
several reasons, tax simplicity can become an alternative to achieve a voluntary tax
compliance.
Such as death, tax in Inevitable, so lets make it as simple as possible.