Commemorating National Tax Day: What’s the Benefit for the People?

Have you ever wondered where your tax money really goes?

It’s completely natural to feel unsure—especially if you haven’t directly felt the benefits. But in celebration of National Tax Day, commemorated every July 14, Labamu invites you to take a closer look at what taxes are and how they can bring positive impact when managed properly.

Let’s learn together and shift our perspective on taxes from something that feels like a burden into a meaningful contribution to the nation.

The Origins of National Tax Day

According to the official website of the Directorate General of Taxes, National Tax Day was first observed on July 14, 2018, following the issuance of Decree No. KEP-313/PJ/2017 by the Director General of Taxes on December 22, 2017.

This date wasn’t chosen at random. On July 14, 1945, during a session of BPUPKI (Investigating Committee for Preparatory Work for Independence), the idea of tax collection was discussed for the first time as part of the foundational structure of the future Indonesian state. The session was chaired by Dr. KRT Radjiman Wedyodiningrat, who later became known as the Father of Indonesian Taxation.

Although he was a physician by profession, Dr. Radjiman recognized that a country can become “ill” if it fails to manage taxes wisely—and that its people can become “furious” if the government imposes taxes unjustly and irresponsibly. For that reason, he stressed the need for fair, carefully designed tax regulations and systems.

The commemoration of National Tax Day serves several purposes:

• To raise public awareness of the importance of taxation,

• To honor the nation’s historical journey, and

• To encourage government officials to prioritize the welfare of the people in carrying out their fiscal responsibilities.

  
  

It’s a moment to reflect on how taxes are not just a duty—but a shared tool for building a just and prosperous nation.

What Is Tax?

According to Indonesia’s Directorate General of Taxes, a tax is a mandatory contribution that must be paid by individuals or entities to the state, based on law, without direct compensation, and used for national interests to achieve the greatest welfare of the people.

In other words, while you might not feel the benefit of your taxes immediately or directly, you can see the results through public services such as roads, schools, or healthcare facilities.

Meanwhile, Investopedia defines taxes as the main source of government funding—supporting everything from infrastructure development to social security programs.

More broadly, taxes represent a form of national mutual cooperation. When everyone contributes, the state gains the resources it needs to fund development and deliver essential public services. It’s not just about fulfilling an obligation—it’s about building the nation together.

Why Are People Reluctant to Pay Taxes?

If we look at the definition, the intent and benefits of paying taxes are actually noble—to fund national development and improve public welfare.However, in reality, many people feel reluctant—or even try to avoid—their tax obligations. Here are some of the most common reasons why:

1. Not Seeing Direct Benefits

Many feel like their tax money just “disappears” without tangible results. Roads remain damaged, public services are slow, and promised aid never arrives.When the benefits of taxes aren’t clearly visible, trust starts to erode.

2. Lack of Tax Education

Most small business owners were never properly taught how taxes work. As a result, they are confused about obligations, tax types, and payment procedures. This confusion makes taxes feel complicated, leading many to avoid them altogether.

3. Complicated Administrative Process

The tax reporting process in Indonesia is still relatively complex. It takes time, faces technical difficulties, and government assistance is still lacking. For small businesses already busy with daily operations, encountering administrative hassles can instantly discourage tax compliance.

4. Fear of Penalties or Audits

Rather than feeling secure, some worry that filing taxes might invite problems—like input mistakes, underpayment, or even audits.This fear is often caused by a lack of understanding and minimal support during the process.

5. Negative Perception of Tax Management

Cases of corruption and misuse of public funds lead many to be skeptical of the tax system.The lack of transparency only adds to the public’s distrust, making people question whether their money is really being used for the common good.masyarakat—bukan disalahgunakan pejabat.

The Benefits of Taxes When Managed Properly and Responsibly

As explained by the Tax Foundation, for over 5,000 years, taxes have been a fundamental part of governance systems across the world. Unlike businesses that generate income through selling products or services, governments don’t sell goods for profit. Instead, the only sustainable way for a country to fund its public services is through the taxes we pay—whether from income, consumption, or asset ownership.

Despite the ongoing debate and criticism surrounding its implementation, well-managed, fair, and transparent taxation can provide real, far-reaching benefits to all layers of society.

Based on references from the Directorate General of Taxes, here are the key benefits of taxation:

1. Financing Government Expenditures

Taxes are the primary source of government revenue used to fund various needs such as infrastructure development, education, and healthcare services. Without taxes, the government would lack sufficient funds to run public programs.

2. Regulating Economic Balance

Taxes can be used as a tool to steer the direction of the economy—for example, by curbing inflation or stimulating growth in certain sectors. The government can adjust tax rates to control public spending power or attract investment.

3. Promoting Income Redistribution

Through taxation, the government can reallocate income to those in need via social assistance or subsidies. This helps reduce the gap between high-income and low-income groups in society.

4. Maintaining National Stability

Taxes also play a crucial role in maintaining economic stability during crises or market volatility. By carefully managing state revenue and expenditure, the government can help protect consumers' purchasing power. A stable tax system fosters a more predictable and secure business environment.

5. Providing Adequate Public Facilities

The construction of roads, bridges, schools, and hospitals is funded by tax revenue. This means taxes directly support public access to essential services. Development is therefore not solely the government's responsibility but a collective effort by citizens through taxation.

6. Enabling Aid and Subsidy Programs

Taxes enable the government to consistently run various support programs such as cash assistance, energy subsidies, scholarships, and job training. Without tax revenue, these programs would be difficult to sustain.

7. Supporting the Government’s Role in Serving Citizens

The government cannot operate effectively without funding from taxes. All public services are made possible by tax contributions. Therefore, paying taxes is not just an obligation—it is a meaningful contribution to ensure the state remains present and responsive to its people’s needs.

National Tax Day is more than just a symbolic moment—it’s a reminder that we all play a role in building our nation.For small business owners, paying taxes is also a step toward running a more professional and sustainable business.

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