Modernizing Local Government Taxation in Indonesia

In Indonesia, the provincial, city, and regency governments typically rely on the central government for financial support. A shift toward the collection of their own tax revenues would strengthen local governments’ autonomy and encourage accountability to their communities. During 2015–2020, the Tax Revenue Administration Modernization and Policy Improvement in Local Governments (TRAMPIL) project, supported by the Asian Development Bank, provided technical assistance to help Indonesia’s subnational governments collect more locally sourced tax revenues. This report describes the challenges and achievements of TRAMPIL project activities. It presents TRAMPIL’s policy recommendations in the context of Indonesia’s economic and legal parameters on regional autonomy.