No Change in Tax Collection Target: Finance Minister

The Ministry of Finance will evaluate investment incentives for tax holidays and tax allowances, following an unenthusiastic response from investors last year, Finance Minister Sri Mulyani Indrawati said on Monday (08/01). (Antara Photo/Hafidz Mubarak A.)

By : Tabita Diela | on 5:56 PM December 19, 2016
Category : Business, Economy, Featured

Jakarta. Finance Minister Sri Mulyani Indrawati remains upbeat the government can still meet its tax collection target this year even though reports suggest a bigger shortfall in customs and excise fees due to lower-than-expected cigarette production and a shelved plan for a new "plastic bag" tax.

"We have made our calculations carefully, and now we're just hoping for the best," Sri told reporters at the "Indonesia: Economic Prospects" seminar in Jakarta on Monday (19/12).

The ministry's director general of customs and excise Heru Pambudi said his office will likely pull in 97.15 percent of its Rp 184 trillion ($14 billion) target this year.

The figure is less optimistic than the office's own initial estimation of 98.4 percent, which means the directorate now expects a shortfall of Rp 5.24 trillion instead of the projected Rp 3 trillion.

So far, customs and excise fees have only earned the government Rp 133.5 trillion or about 73 percent of its target.

Finance Minister Sri Mulyani said the government is still confident it will be able to get at least 86 percent of the tax revenue target of Rp 1,539.2 trillion in the 2016 state budget.

Despite the setback, the government is set to collect Rp 1,320.2 trillion in various taxes, as well as customs and excise fees this year.

The government has collected Rp 1,098.5 trillion in taxes as of the end of November or about 83 percent of the target.

"We will see how much we're getting from the tax amnesty program and from the routine tax collection," she said.

"The combination of spending cuts and [the ministries'] ability to maximize what they get for the money they spend is good enough to keep our fiscal space at 2.7 percent this year," she said.

The central and the regional governments have spent a total of Rp 1,636 trillion in the same period, or about 84 percent of their total spending target of Rp 2,082.9 trillion, before a spending cut of Rp 133.8 trillion.

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