'Hunting animals in a zoo'? Regulating Indonesia's high wealth individual taxpayers

This paper examines the rise and fall of a special purpose High Wealth Individual (HWI) unit in the Indonesian Directorate General of Taxation (DGT), 2009-2012. Fifty-four participants and observers of the implementation process reported on the contest over the principles and mechanisms of tax reform. The new HWI unit initially brought enthusiasm and dialogue about building relationships with taxpayers and assembling integrated databases of HWI business interests. These ideas, however, conflicted with past institutional practices. Revenue targets assigned to local tax authorities by head office trumped the new units priorities. Messaging within the tax authority that the unit would increase revenue collections was not shared with HWIs and their advisers. Assumed deception triggered cynicism that nothing had changed in DGT. The unit failed to perform to expectations. The research shows how local institutions and tax culture can wreak havoc on transfers of international best practice in tax policy.