Two Sides of the Same Coin: Direct Taxation and Negotiated Governance in Colonial Indonesia

Abstract

Abstract This article investigates the implementation of direct taxes in colonial Indonesia between roughly 1870 and 1930, to widen our understanding of colonial governance and fiscal state building. It examines the various connotations given to taxation by colonial politicians and statesmen, and elucidates how these were developed and experienced rather differently in practice. Taxes became rooted in local patterns of customary law, indirect rule, and constant negotiation between colonial officials, local indigenous rulers, and subjected taxpayers. This demonstrates that local, colonial institutions did not have the weight and capacity state officials claimed they had, and that in colonial context, bottom-up practices of negotiated governance and consultation, that deliberately ignored the rules of fiscal bureaucracy imposed from above, were pivotal to taxation.