Disaster Response in Indonesia: Initiating Income Tax Policy Pro Disaster Mitigation

As a country with high potential for natural disaster, Indonesia can suffer from economic disruptions arising from significant decline in gross domestic income (GDP) due to financing losses caused by natural disaster. To reduce the risk of loss caused by natural disasters, the government has issued...

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Main Authors: Dini Dubelmar, Made Astrin Dwi Kartini, Sabila Mareli, Murwendah Murwendah
Format: Article
Language:English
Published: Political Science Program, Universitas Negeri Semarang 2020-08-01
Series:Politik Indonesia: Indonesian Political Science Review
Subjects:
Online Access:https://journal.unnes.ac.id/nju/index.php/jpi/article/view/21363
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author Dini Dubelmar
Made Astrin Dwi Kartini
Sabila Mareli
Murwendah Murwendah
author_facet Dini Dubelmar
Made Astrin Dwi Kartini
Sabila Mareli
Murwendah Murwendah
author_sort Dini Dubelmar
collection DOAJ
description As a country with high potential for natural disaster, Indonesia can suffer from economic disruptions arising from significant decline in gross domestic income (GDP) due to financing losses caused by natural disaster. To reduce the risk of loss caused by natural disasters, the government has issued disaster mitigation policies in the form of structural and non-structural policies. In 2018, the government initiated a disaster mitigation policy in the form of natural disaster insurance prioritized to protect state assets. It does not exclude the possibility that this insurance shall be given to civil society, yet an issue arises regarding the source of funding for the insurance. Tax instruments are expected to be a policy innovation to overcome the issue of financing insurance. The purpose of this study is to explore the potential and role of fiscal policy through tax instruments in the context of disaster management in Indonesia. This study applied a qualitative approach and collected data through field studies and in-depth interviews. The findings of this study indicate that the natural disaster insurance policy may adopt the concept of tax allowance on donation and zakat as stipulated in Law No. 36 of 2008 on Income Tax. This incentive provides a tax facility in the form of tax allowance on income for calculating Income Tax. The policy is expected to attract the community to participate in natural disaster insurance amid the general lack of participation in insurance in Indonesia. On the other hand, the government obtains a source of revenue to finance disaster mitigation without disrupting the economy of the country.
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spelling doaj.art-9643f9a14a5740d0b3182af1778a1cdd2022-12-21T19:04:45ZengPolitical Science Program, Universitas Negeri SemarangPolitik Indonesia: Indonesian Political Science Review2477-80602503-44562020-08-015224325610.15294/ipsr.v5i2.2136310086Disaster Response in Indonesia: Initiating Income Tax Policy Pro Disaster MitigationDini Dubelmar0Made Astrin Dwi Kartini1Sabila Mareli2Murwendah Murwendah3Universitas IndonesiaUniversitas IndonesiaUniversitas IndonesiaUniversitas IndonesiaAs a country with high potential for natural disaster, Indonesia can suffer from economic disruptions arising from significant decline in gross domestic income (GDP) due to financing losses caused by natural disaster. To reduce the risk of loss caused by natural disasters, the government has issued disaster mitigation policies in the form of structural and non-structural policies. In 2018, the government initiated a disaster mitigation policy in the form of natural disaster insurance prioritized to protect state assets. It does not exclude the possibility that this insurance shall be given to civil society, yet an issue arises regarding the source of funding for the insurance. Tax instruments are expected to be a policy innovation to overcome the issue of financing insurance. The purpose of this study is to explore the potential and role of fiscal policy through tax instruments in the context of disaster management in Indonesia. This study applied a qualitative approach and collected data through field studies and in-depth interviews. The findings of this study indicate that the natural disaster insurance policy may adopt the concept of tax allowance on donation and zakat as stipulated in Law No. 36 of 2008 on Income Tax. This incentive provides a tax facility in the form of tax allowance on income for calculating Income Tax. The policy is expected to attract the community to participate in natural disaster insurance amid the general lack of participation in insurance in Indonesia. On the other hand, the government obtains a source of revenue to finance disaster mitigation without disrupting the economy of the country.https://journal.unnes.ac.id/nju/index.php/jpi/article/view/21363natural disaster insurancedisaster mitigationtax allowanceincome taxpolicy innovation
spellingShingle Dini Dubelmar
Made Astrin Dwi Kartini
Sabila Mareli
Murwendah Murwendah
Disaster Response in Indonesia: Initiating Income Tax Policy Pro Disaster Mitigation
Politik Indonesia: Indonesian Political Science Review
natural disaster insurance
disaster mitigation
tax allowance
income tax
policy innovation
title Disaster Response in Indonesia: Initiating Income Tax Policy Pro Disaster Mitigation
title_full Disaster Response in Indonesia: Initiating Income Tax Policy Pro Disaster Mitigation
title_fullStr Disaster Response in Indonesia: Initiating Income Tax Policy Pro Disaster Mitigation
title_full_unstemmed Disaster Response in Indonesia: Initiating Income Tax Policy Pro Disaster Mitigation
title_short Disaster Response in Indonesia: Initiating Income Tax Policy Pro Disaster Mitigation
title_sort disaster response in indonesia initiating income tax policy pro disaster mitigation
topic natural disaster insurance
disaster mitigation
tax allowance
income tax
policy innovation
url https://journal.unnes.ac.id/nju/index.php/jpi/article/view/21363
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AT madeastrindwikartini disasterresponseinindonesiainitiatingincometaxpolicyprodisastermitigation
AT sabilamareli disasterresponseinindonesiainitiatingincometaxpolicyprodisastermitigation
AT murwendahmurwendah disasterresponseinindonesiainitiatingincometaxpolicyprodisastermitigation