Turning Java into a Modern Fiscal State: The Abolition of Chinese Revenue Farming and the Creation of a Modern Taxation System in Colonial Java, 1870s -1920s

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Abstrak Thesis Oleh: Abdul Wahid, M.Phil (History Department, Leiden University)

This thesis discusses the operation and then abolition of the so-called pachtenstelsel or revenue farming and its contribution to the process of colonial state formation in Java. It was a system, developed since the rule of the VOC, by which the colonial state leased, through auction to the highest bidder – mostly the Chinese, the rights of monopoly to collect taxes or to engage in a particular activity for profit, in return for an agreed fixed price on a routine basis. By using colonial reports and secondary literature, the thesis shows how the system, after being practiced extensively as a means of exploitation throughout the nineteenth century, was abolished due to several considerations. Colonial investigations proved that the system was prone to corruption; it eroded the legal foundations of the official administration, and allowed the Chinese pachters to strengthen their economic influence in rural areas at the expense of the impoverished indigenous people. The abolition process took place gradually, sometimes with difficulty and resistance, of which opium and pawnshop farms are instances. This fiscal reform was implemented through three different measures: complete abolition, change to direct taxation, and direct administration over the remaining areas. This administrative reform was fully accomplished in the first decade of twentieth century. As the result, this thesis concludes that, by the second decade of the twentieth century, the Dutch government had successfully created a unified tax system and a system of centralized state monopoly. This instituted Java as the centre of a modern colonial state.

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