It is tax season, and 14 million individual taxpayers must fill and submit their tax reports. So far, 6.1 million reports have been filed, and the remaining taxpayers have until Mar. 31 to fulfill their obligation. (JG Photo/Afriadi Hikmal)

2015 Budget Revision Approved


FEBRUARY 15, 2015

Jakarta. After a series of meetings and tough arguments, the revision of the 2015 state budget was finally approved by the plenary meeting of the House of Representatives on Friday.

Taufik Kurniawan, a deputy chairman of House Commission XI, which oversees the economy and finance, said the House had stamped its approval on the 2015-state spending law.

State-budget spending in Indonesia is made into law to give it legal justification. It is valid until the end of the fiscal year.

Finance Minister Bambang Brodjonegoro said the fast revision “is proof of the government’s commitment to speeding up development,” as well as the response to dynamics in the global economy.

Previously, state-budget revisions were completed in June, causing delays in spending.

President Joko Widodo has set a target to revise the state budget as early as possible to enable more efficient government spending.

The revised budget sets a 20 percent increase in taxation revenue to Rp 1,439.9 trillion ($112 billion) from the original budget.

The target was set at Rp 1,201.7 trillion in the 2015 initial budget, up from the 2014 revised-budget at Rp 1,189.8 trillion.

Minister Bambang detailed the figure. He said the taxation revenue includes Rp 679.37 trillion from income tax collection; Rp 576.46 trillion from value-added tax and luxury goods tax; Rp 26.68 trillion from land and building taxes; Rp 145.73 trillion from excise tax; Rp 49.25 trillion from international trade taxation and Rp 11.72 trillion from other taxations.

Meanwhile, the total state revenue is set at Rp 1,761.6 trillion, including tax revenue and grants.

State spending, on the other hand, is set at Rp 1,984.1 trillion, which includes Rp 1,319.5 trillion of central-government spending and Rp 664.6 trillion worth of fund transfers to regions and village development funds.

The state-budget deficit is set at Rp 222.5 trillion, or 1.9 percent of the gross domestic product.

The government sets a target to obtain Rp 262.5 trillion worth of financing, which includes Rp 242.5 trillion of financing from the domestic market and Rp 20 trillion from abroad.

Minister Bambang said although the global economy shows some improvement, some challenges may affect Indonesia’s economy, including the prospect of the US central bank raising its key rate, as well as  continuing low oil prices.

“The lower oil price has weakened the overall commodity prices. It will impact our nation’s export performance,” he said, adding that state revenue from oil exports would also fall.

Investors typically dump assets from emerging markets and re-invest in the United States, seen as a safe haven, should the Federal Reserve raise its rate.

Analysts say this would trigger a massive capital outflows, not only draining liquidity from Indonesia, but also impacting the value of the rupiah.

The revised budget has set oil at a lifting target of 825,000 barrels per day, and gas lifting at a 1.22 million barrel equivalent.

Investor Daily