rayestu

I sense that the natural response to the question stated on the title of this writing is “of course” or “duh”. But let us look a little more open-mindedly on reality. As a matter of fact, it is not always bad for the economy. Tax evasion is the effort to escape from the duty to pay taxes, normally by misstating financial statements and/or bribing government tax collectors (the IRS, or Ditjen Pajak). It was reported that in the year 2010, the RI government suffered a total loss of Rp 5.8 trillion (around US$ 60 billion) due to tax evasion. One thing is certain, tax evasion is always bad for the government. But what about the economy as a whole? The most used measure of the welfare of an economy is the Gross Domestic Product (GDP), the total value of goods and services produced by an economy during a period. It is made up of four components: Consumption, investment, government expenditures, and net export, hence the equation Y=C+I+G+NX. This equation actually tells us that taxes are