The Role of Fiscal Policy in Economic Growth and Tax Awareness
I am a Student in the Tax Accounting Study Program at Pamulang University, with an interest in and desire to deepen my knowledge of accounting and taxation.
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Tulisan dari AL GHIFARI RAMADHAN tidak mewakili pandangan dari redaksi kumparan
PerbesarIntroduction
I realise that fiscal policy plays a vital role in shaping a nation's economic growth. Through fiscal policy, the government regulates the balance between revenue's and expenditure's to achieve economic stability. Within this framework, taxation serves not only as the main source of state revenue's but also as an instrument of economic control.
However, i also recognize that Indonesia faces significant challenge's in the implementation of fiscal policy, particularly in ensuring the effective use of public fund's and improving tax payer's awareness.
Fiscal Policy as an Instrument of Economic Growth
Fiscal policy operates through two main approaches: expansionary and contractionary fiscal measure's. When the economy slows down, the government often adopt's an expansionary fiscal policy by increasing public spending or reducing taxe's to stimulate consumption and investment. Conversely, when inflation rises, a contractionary fiscal policy is applied to moderate demand and maintain price stability.
In 2024, Indonesia's economic growth was recorded at 5.2%, reflecting a stable and resilient post pandemic recovery supported by strong domestic demand and improved investment performance (PWC Indonesia, 2024; Bank Indonesia, Monetary Policy Report Q4 2024). This figure is consistent with the government's target range of 4.7 – 5.5%, illustrating the positive impact of sustained fiscal expansion, particularly in infrastructure, education, and health sector's.
At the same time, the state revenue's target ini 2024 National Budget (APBN) reached proximately IDR 2,802.3 trillion, with tax's revenue forming the largest share of total income (DJKN Kemenkeu, 2024).
The Role of Taxation in Achieving Fiscal Independence
As a student, i saw the taxation as the strongest of Nation Revenue's. Nevertheless, one of Indonesia persistant challenge's is the low level of tax awareness among citizen's. Many taxpayer's have yet to understand that every rupiah paid in taxe's return's to society's through public service's and infrastructure development. This highlight's the importance of both fiscal education and transparency. The government must foster public trust through accountable and open fiscal management.
Student Reflection on the Future of Fiscal Policy
As part of the younger generation who will soon engage directly in the taxation field, i feel moral responsibility to enhance my tax literacy and deepen my understanding of fiscal dynamic's. Such knowledge is not only essential for future tax professional's but also for all citizen's concerned with the nation economic future.
I believe that an ideal fiscal policy is not merely about balancing figure's in the national budget, but about creating social equity and broad based growth. The government must ensure that every tax reform and public expenditure genuinely improve's societal welfare and economic resilience.
Conclusion
Ultimately, the relationship between fiscal policy and economic growth cannot be separated from the level of public tax awareness. An effective fiscal policy require's the participation of responsible tax payer's who understand the significance of their contribution's to national development. As a student, i committed to continuous learning, research, and participation in building a fairer, more transparent, and growth oriented taxation system for the prosperity of the nation.