International tax expert Professor Lee Burns delivered a public lecture and joined a collaborative meeting at the Faculty of Administrative Sciences, Universitas Indonesia (FIA UI) to discuss international tax reform.

The global economy is currently experiencing a paradigm shift in international taxation, driven by the Base Erosion and Profit Shifting (BEPS) 1.0 and 2.0 initiatives. These reforms aim to address the challenges of taxation in the digital economy era and combat harmful tax avoidance practices.

The event opened with remarks from FIA UI Dean, Prof. Dr. Dra. Retno Kusumastuti Hardjono, M.Si., who stated, “As we know, international taxation is a highly dynamic topic, especially in today’s globally connected world. Cross-border transactions and multinational corporations create complexities that cannot be resolved solely through domestic tax laws.”

In his presentation, Prof. Lee outlined the background of the BEPS project, which began in 2013 with 15 actions proposed by the Organization for Economic Co-operation and Development (OECD) to tackle base erosion and profit shifting by multinational companies. The initiative has since evolved into BEPS 2.0, which specifically addresses the digital economy through Pillar 1 and introduces a global minimum tax through Pillar 2.

One of the key points discussed was the impact of the Global Minimum Tax (GMT) on tax incentives. Prof. Burns emphasized that profit-based incentives such as tax holidays or low tax rates would be problematic, as they could reduce the effective tax rate to below 15 percent. In contrast, cost-based incentives such as accelerated depreciation could still be maintained if managed properly and if the resulting timing differences are reversed within five years. He noted that the dilemma between tax competition to attract investment and the need to increase revenue is strongly felt in ASEAN, where countries like Indonesia, Malaysia, and Thailand are redesigning tax incentives to align with GMT while maintaining a strong preference for tax holidays.

Prof. Burns concluded by highlighting the complexities of implementing GMT, including the significant administrative burden for developing countries and the challenges of managing refundable tax credits and monitoring temporary differences.

Following the public lecture, FIA UI and Prof. Lee Burns continued discussions in a collaborative meeting held at the Smart Class on the third floor. The meeting focused on strengthening international cooperation between FIA UI, Professor Burns, and the University of Sydney, with the primary aim of advancing FIA’s presence on the global stage and developing new international programs for students.

Topics discussed in the collaboration session included potential research and publication partnerships between FIA UI and the University of Sydney, the establishment of an international class program for undergraduate students, and efforts to improve the English curriculum.

The collaborative meeting received full support from the Dean of FIA UI, who expressed hope that all planned activities would bring positive impact to FIA and UI. The event was attended by the Head of the Fiscal Administration Department, the International Office Coordinator of FIA UI, and several faculty members.