Jakarta (ANTARA) - National Development Planning Minister and National Development Planning Agency Head Suharso Monoarfa highlighted the need for fiscal policy transformation in order to realize Golden Indonesia 2045.

Comprehensive fiscal policy transformation will be undertaken to improve the state revenue, spending, and financing, he stated while meeting with Coordinating Minister for Economic Affairs Airlangga Hartato, as quoted from his Instagram account @suharsomonoarfa on Friday.

Moreover, adaptive fiscal rules are needed to improve flexibility and fiscal space based on the development need while the debt level is considered to ensure fiscal sustainability, and credible and accountable state revenue institution is also bolstered, he elaborated.

According to Monoarfa, policies to increase tax revenue are undertaken through several methods. The first involves expediting the taxation policy and administration reformation in line with more productive economic structure changes.

The second revolves around improving the tax base through law enforcement and tax payers' compliance while also encouraging the informal sector to become a formal sector.

The third concerns exploring new sources of tax revenue, such as sin tax, carbon tax, and from non-tax sources to reduce dependency on natural resources.

"The last method involves strengthening the state revenue institution," the minister remarked.

To realize Golden Indonesia 2045, he also noted that the monetary policy will be directed toward pro-growth and pro-stability.

Monoarfa outlined seven points to implement the pro-stability monetary policy.

These comprise anchoring inflation in the long term on an accommodative level, implementing a new paradigm for the benchmark interest rate policy, and maintaining the stability of exchange value to match its fundamental value.

Moreover, the other points comprise realizing a modern and efficient payment system and also managing sufficient foreign exchange reserves.

"Then, these also involve maintaining the financial system's liquidity and stability through policy mix (monetary, macroprudential, payment systems) and development of a monetary policy instrument to encourage financial market deepening," he stated.

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Translator: M Baqir I A, Fadhli Ruhman
Editor: Rahmad Nasution
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