Saturday, 14 December 2019

Tax Revenue Not Achieved, Sri Mulyani: Economic Changes

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Mahinda Arkyasa

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  • TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati denied the notion that tax revenue target often set too high causing the government to fail to achieve it. Sri Mulyani said that the target was made based on calculations and discussion with the House of Representatives.

    According to Sri, the problem is that economic conditions often changes dynamically. "Economic conditions can change just like what happened in 2019 because of acceleration the global economic slowdown affect domestic economy," Sri Mulyani said on Saturday, November 2, 2019.

    With such uncertainty, assumptions on commodity and oil prices changes. As a result, the government will continue to face uncertain conditions in determining components in drafting the State Budget.

    On the other hand, Sri Mulyani underlined that based on laws and regulations, the possible changes in the economic condition has been addressed. "What's most important is the legal basis and the use of the State Budget to maintain the economy to remain sustainable. That is most important," Sri said.

    Therefore, Sri Mulyani said that in terms of numbers, especially the revenue aspect, is almost impossible to be accurate. Because the economy constantly changes. "But we will continue to try to approach what has been targeted," Sri added.

    On September 17, 2019, Sri Mulyani stated her optimism that the tax revenue target in 2019 will be achieved. Although, she admitted that currently, Indonesian economy is under major pressure. "Tax revenue target for 2019 is hard, but that does not mean we cannot achieve it," Sri stated on September 17. 2019.

    The government had previously set a target for tax revenue in the 2019 State Budget at an amount of IDR 1,577 trillion. Meanwhile the number of tax revenue in the first semester of 2019 had reached IDR 603.34 trillion, The number constitutes 38.25 percent of the total target.

    On the other hand, Sri predicted that the State Budget deficit will increase to a level of 2 to 2.2 percent of the Gross Domestic Product compared to the 1.86 percent recorded last year. "So we will maintain it," Sri Mulyani said.

    Previously the risk of a shortfall in tax revenue is projected to continue because until October 7, 2019, the actual tax revenue had only reached IDR 912 trillion or minus 0.31 percent. With the minus 0.32 percent revenue trend, the realization of tax revenue for this year is predicted to be in the level of 85 percent to 87 percent, which is equal to IDR 1,340.8 trillion to 1,372.4 trillion of the total revenue target of IDR.1,577.5 trillion.

    Earlier, Chief of the Business Association Tax Division Siddhi Widyaprathama commented on the issue of the shortfall that often occurred. Siddhi suggested that the Directorate General of Tax must conduct profiling steps. The steps will reveal the business sectors that are yet to comply and what approach needs to be taken.

    In addition, Siddhi also suggested that the tax revenue target is made based on previously achieved numbers. "Not use last years target and increase it," Siddhi said.

    CAESAR AKBAR