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TAXATION - Finance Minister Sri Mulyani Indrawati has claimed that the tax revenue target of Rp 1.61 quadrillion (US$ 120.40 billion), as stated in the draft 2018 state budget, is realistic as it is only a 9.30 percent increase from this year’s target of Rp 1.47 quadrillion.
This projection is relatively moderate compared to the expected 14.5 percent growth of the 2017 tax revenue, the minister said on Friday.
Sri Muyani expressed her confidence that the target could be achieved, considering several positive factors, including the tax amnesty, the Automatic Exchange of Information (AEOI) and the current healthy economic condition.
The government aims to collect Rp 1.88 quadrillion in state revenue next year, Rp 267 trillion of which came from non-tax revenue (PNBP).
State expenditure was proposed at Rp 2.2 quadrillion, making the deficit projection in next year’s budget stand at Rp 325.9 trillion, or 2.19 percent of gross domestic product (GDP).
Meanwhile, Lana Soelistianingsih, an economist at the University of Indonesia (UI), said the tax revenue target was too ambitious, adding that the government could not refer to the previous years’ targets, because the state usually manages to collect less than 90 percent of these figures.
“In the last two years, the government could only collect 83 percent of the tax revenue target set in the state budget,” she said.
Lana also expressed pessimism that joining the AEOI program could boost tax revenue collection, because if the program started in January, 2018, the result could only be seen one year after. (mrc/bbn)
