Jokowi Must Boost Tax Revenue, says Analyst

TEMPO.CO, Jakarta - The new government under president-elect Joko Widodo must boost tax revenue because tax ratio currently only contributes 12 percent to gross domestic product, according to Perkumpulan Prakarsa executive director Setyo Budiantoro.

“That figure is too small compared to tax ratio in other middle-income economies who have 19 percent from GDP,” he told Tempo on Monday.

Setyo said ratio could be increased by rising tax revenue to Rp100 trillion per year. This could be done by expanding the number of taxpayers, increasing taxpayer compliance and banking tax and optimizing international regulation.

The government and the House of Representatives target tax revenue of Rp1,380 trillion next year, higher than this year’s Rp1,072 trillion.

The target will be achieved through law improvement, expansion and intensification of taxation and adjustment of policies in import and export duties as well as income tax.

Tax director general Fuad Rahmani said until September 26, tax realization received by the state has reached Rp683 trillion or just 64 percent from target of Rp1,072 trillion. This achievement is still higher compared to the realization in the same period last year.

AMOS SIMANUNGKALIT | GUSTIDHA BUDIARTIE