Indonesia ztargeted Tax Revenues US$34.94 Billion from Big Taxpayers - Photo by Finance Ministry Office

JAKARTA (TheInsiderStories) – Indonesian government targeted tax revenues Rp498trillion (US$34.94 billion) from big taxpayers, both personal and institution, said one minister yesterday (03/13). It increases by 18.93 percent from last year’ big taxation realization at Rp418.73 trillion.

The target is in accordance to the total tax revenue target at Rp1,577.6 trillion in 2019, said Finance Minister Sri Mulyani Indrawati. Moreover, she considered the growth is still positive. According to her, on average, the tax revenue growth increased by 15-16 percent annually.

Last year, Indonesia’ tax realization was missed from what it previously eyed. It was only reached 92.4 percent of the Rp1,424 trillion target. “This year, the target must be achieved,” Indrawati insisted.

She expects that both big personal and institutions taxpayers can contribute more. While this year’ big taxpayers target contribution is 31.57 percent of the total Indonesia’s tax revenue.

Director general of taxation Robert Pakpahan mentioned that some efforts must be done to reach the target. He explained that ministry will increase data sharing cooperation with third parties. The taxation data integration with state-owned enterprises will also be prioritized to increase taxpayers’ compliance.

For the directorate general of taxation, he added, data integration will help monitoring, getting potency of other taxpayers, and increasing taxation revenue. While for taxpayers, it will ease tax annual notice, decrease compliance cost, and cut administration cost.

Indonesian government and lawmakers from the budget committee had agreed to raise the outlook on tax revenue in the 2019 State Budget to Rp1,784 trillion from earlier estimates of Rp1,781 trillion on expectations of higher income from the oil and gas sector.

The government, represented by the finance ministry, and the budget committee had also agreed to raise the budget’ macro-assumption on Rupiah exchange rate to 14,500 per US$1 from previously 14,400 per US$1. The oil output goal was also raised to 775,000 barrels per day from 750,000 barrels per day.

Higher assumption on dollar exchange rate and oil output stipulated in the 2019 state budget is equal to an additional state income of more than Rp1 trillion. That means the government would still have to generate more tax revenue from other sectors.

The original tax revenue assumption in the 2019 budget is already high, aiming for 15 percent increase from this year’ outlook of Rp1,548 trillion. The government had been struggling to meet tax revenue aim, though this year is expected to record a slight improvement as economic activities are gaining traction.

To achieve the higher objective in 2019 tax revenue, the government has to increase Indonesia’ tax ratio to 12.1 percent in 2019 from 10.7 per cent in 2017. The government expected the tax ratio to reach 11.6 per cent by the end of 2018.

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