Tax Revenue Misses Target Due to Stagnated Cigarette Production

TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati said that the state revenue from cigarette excise only reached 97.15 percent of the target set in the Revised 2016 State Budget since cigarette production stagnated last year.

“It depends on the perspective. For cigarette manufacturers, this is bad news. However, for the health sector, this is good news,” Sri Mulyani said in a work meeting with House of Representatives’ Commission XI overseeing finance and banking affairs at the Senayan Parliamentary Complex in Jakarta on Wednesday, January 18, 2017.

Sri revealed that she had instructed the Customs and Excise Directorate General to focus on eradicating illegal cigarettes. Due to high excise tariff, Sri Mulyani said that companies could be manufacturing illegal cigarettes.

In 2016, the state revenue from customs and excise reached Rp178.72 trillion (US$13.4 billion), or 97.15 percent of the target set in the Revised 2016 State Budget at Rp183.96 trillion (US$13.8 billion). The figure declined from that in 2015 that reached Rp179.58 trillion (US$13.5 billion).

Director general of customs and excise Heru Prambudi said that the excise realization was Rp143.5 trillion (US$10.7 billion) or 96.9 percent of the target in the Revised State Budget. In addition, the revenue from import duty reached Rp32.2 trillion (US$2.4 billion), and that from export duty reached Rp2.99 trillion (US$224.8 million).

Minister Sri claimed that the revenue from import duties had improved over the last few months.

“There’s an increasing trend in the fourth quarter of 2016. Exports and imports are still negative so that revenue from customs, including import duties declined,” Sri Mulyani said.

ANGELINA ANJAR SAWITRI