Strategic Mapping of Tax Haven Jurisdictions and the Political Economy of Global Transparency: Optimizing Indonesia’s Fiscal Sovereignty in the Era of Pillar Two

Abstract

Tax revenue serves as the primary pillar of Indonesia’s fiscal sustainability; however, the nation continues to struggle with a low tax-to-GDP ratio, fluctuating between 8% and 11% over the last five years. This study investigates the systemic impact of tax haven jurisdictions on Indonesia’s revenue mobilization and evaluates the effectiveness of international cooperation frameworks, specifically the Automatic Exchange of Information (AEoI) and the Base Erosion and Profit Shifting (BEPS) Pillar Two. Utilizing a composite mapping methodology that integrates the Financial Secrecy Index (FSI), Corporate Tax Haven Index (CTHI), and IMF data, this research identifies top-tier risk vectors, with Singapore, the British Virgin Islands, and Hong Kong emerging as primary destinations for Indonesian capital flight. The analysis reveals that while global AEoI frameworks have reduced offshore deposits by an average of 25%, its efficacy in Indonesia is hindered by data quality issues, reported losses, and a lack of full reciprocity from major economies. Furthermore, the implementation of a 15% Global Minimum Tax (GMT) under PMK 136/2024 necessitates a radical redesign of Indonesia’s fiscal incentives, shifting from traditional tax holidays to expenditure-based credits. The study concludes that optimizing revenue requires a multidimensional reform focusing on digital tax infrastructure, the judicial "Substance Over Form" doctrine, and active participation in the evolving global tax governance architecture.