Tax amnesty covers 2016 state budget deficit

Jakarta. Tax amnesty revenues have decreased the deficit of 2016 Revised State Budget. Ministry of Finance reported that as of 30 September 2016, government booked Rp 224.3 trillion of deficits or 1.79% of Gross Domestic Product (GDP).

The amount of deficit in September is lower than in Rp 230.7 trillion and Rp 262.5 trillion of deficit in June and August 2016. An Rp 92 trillion revenues from the first phase of tax amnesty has brought significant effect to improvement in 2016 Revised State Budget deficit.

Minister of Finance Sri Mulyani Indrawati said that government will apply front loading scheme in funding capital expenditure to maintain government’s cash flow. During the first 8 month in 2016, state revenues from taxation sector were under target.

According to Sri, government needs to increase the tax revenues, despite tax amnesty revenues have contributed to the increase in state revenues, mainly in September 2016.

As of 30 September 2016, an amount of Rp 869.1 trillion tax revenues comprises of 58.2% of Rp 1,081.2 trillion state revenues realization. During the period, non-oil and gas income tax revenues comprised Rp 476.5 trillion of the total tax revenues.

The number of non-oil and gas income tax revenues has increased from Rp 375.8 trillion in the same period in 2015. “Tax amnesty has generated the high increase”, said Sri Mulyani.

Meanwhile, the realization of government expenditure in September 2016 reached Rp 767.7 trillion or 59% of Rp 1,306.7 trillion target. During the same period in 2015, the government expenditure realization only stood at the rate of 55%.

Member of Commission XI from Golkar faction Mukhamad Misbakhun appreciated government performance in reducing deficit. However, Misbakhun suggested to monitor the realization of macroeconomic as of 30 September 2016.

For an example, during the period national economy grew by 5.04% or lower than 5.2% economic growth target. It is predicted that economy will grow by 5% by the end of 2016.

Sri Mulyani warned government to monitor rupiah exchange rate, amid the possibility of the increase in The Fed’s rate.

(MUHAMMAD FARID/Translator)