Saturday, 2 December 2017

Indonesia collects 78 pct of 2017 tax target by end-November

Reuters Thursday November 30, 2017 4:14 AM
JAKARTA, Nov 30 (Reuters) - Indonesia collected 78 percent of this year's tax target through the end of November, the outgoing head of tax office said on Thursday.

The government's state budget targetted 1,472.7 trillion rupiah ($108.93 billion) in tax revenue this year, up from 1,285 trillion rupiah in 2016.

Yustinus Prastowo, executive director of the Center for Indonesia's Taxation Analysis, a private consultancy, estimated that Indonesia can collect 90 percent of this year's target, an improvement on 83 percent a year earlier.

But this year's target "has been too high for the weak economic condition," he said.

Indonesia has struggled to lift its economic growth rate above 5 percent, in spite of rate cuts by the central bank and deregulation moves by the government.
Any shortfall in tax collection could mean a widening of the fiscal deficit, which by law cannot exceed 3 percent. The official target for the 2017 deficit is 2.92 percent, though government officials earlier said it might only be 2.6 percent.

Ken Dwijugiasteadi, who retires as head of the tax office on Thursday, declined to comment on the deficit.

Finance Minister Sri Mulyani Indrawati told Reuters earlier this month that the challenge for the government is to achieve its tax targets, while avoiding any disruption of economic growth momentum. The government launched a tax amnesty program last year to broaden the taxpayer base, and nearly $360 billion of assets were declared before it ended in March this year.

Prastowo said the amnesty "has improved compliance by individual taxpayers" but did not have a significant impact on collections yet.

($1 = 13,520 rupiah)

(Reporting by Cindy Silviana; Writing by Fransiska Nangoy)

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