Jakarta. Revenues from tax amnesty and non-tax amnesty are coming in lower than expected. Under this circumstance, government is suggested to further slash its spending by more than IDR137.6 trillion.
Economist from Maybank Indonesia Juniman said that the government may further cut the state’s expenditure, as long as it does not affect the productive budget. “The budget austerity should be done gradually to avoid the shock”, said Juniman on Friday (2/9).
The budget austerity may affect the economic growth. However, the government can revive the economy by acceleratinginfrastructure spendings and pursuing investment targets.
The government should accelerate the infrastructure spending in order to maintain private consumption at above 5% so that domestic economy can grow 5%.
Recently, Directorate General of Taxation are facing dilemma. On one hand, they have to boost revenues from tax sources.
But on the other hand, the government released tax amnesty program, as a result, the revenues from tax sources in this year are lower than last year.
Director of Tax Potential, Obidience, and Revenue of the Direcotate General Taxation Yon Arsal said that until Monday (29/8), the government has only managed IDR596 trillion of tax revenues or only 44% of the target of 2016 Revised State Budget (APBN-P).
In order to anticipate the further revenue shortfall, Minister of Finance Sri Mulyani has prepared three exit strategies. First, to increase the debt by expanding deficit from 2.35% to 2.5%.
Second, to further cut the budget. Third, to revise the cash flow management by extending infrastucture projects period from one year to multiyears.
(MUHAMMAD FARID/Translator)
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