From Revenue Farming to State Monopoly: The Political Economy of Taxation in Colonial Indonesia, Java c. 1816-1942

Abstract

This study analyzes the evolvement of tax system in colonial Indonesia and its social, politic and economic consequences. It focuses on the transformation of what was known as pachtstelsel or revenue farming, a tax collecting system involving the role of private party, mainly Chinese businessmen that was in practice throughout the nineteenth century, into a substitute system called regiestelsel or state monopoly and state collected taxes introduced at the turn of the twentieth century. Both taxation systems constituted a larger part of taxes introduced in Java, but also in Sumatra and other islands in the archipelago, which during the period concerned contributed a substantial revenue to the colonial finance. Built on a critical framework that views colonial tax system as an arena of power contestation between the government, its agents, and its tax-paying subjects, this study considers the changing taxation system in colonial Indonesia not merely an administrative process as part of the modernization process of the colonial state administration, but also a reflection of the changing nature of the colonial state and its changing relation with colonial societies as a whole. Therefore, this study investigates the social political process behind those changes, the impacts they had upon the life of different groups of society, the ways they shaped the nature of colonial state practice in Indonesia, and the reactions of various groups of society. Through a perusal of colonial archives and various historical sources, the book seeks to offer a fresh understanding of the colonial state, its practices in day to day basis and its institutional legacies in modern Indonesia.