Govt Tells Tax Office to Stick to Target Despite Low Projection
Jakarta. The Finance Ministry's new director general of tax will still need to fulfill next year's ambitious tax collection target, as the government has offered no indication of a target revision despite this year's failure to rake in the required amount, a senior official said.
Suahasil Nazara, head of the fiscal policy office at the Finance Ministry, said the government would try to increase tax collection by improving taxpayers' compliance through a better tax administration.
"We have set homework to improve compliance, especially from people who haven't been included into our tax system. I also hope the tax amnesty regulation will be finished soon as we prepare for its infrastructure," Suahasil said.
Indonesia has set its 2016 tax collection target, excluding excise and duties, at Rp 1,360.14 trillion ($98.58 billion) — 5.1 percent higher than this year's target.
Sigit Priadi Pramudito, who recently resigned as director general of tax over his failure to reach his target, estimated that tax collection would reach only 80 to 82 percent of its Rp 1,294.3 trillion tax goal this year.
Suahasil said the ministry will also try to prop up the economy through tax incentives.
"The point from a [state] budget that relies on tax is that we should let the economy grow. This is a very important perspective. This is where the tax steps in because without it the companies won't enter. Economic activities allow the tax to grow, but it takes time," he said.
Yustinus Prastowo, executive director of the Center for Indonesia Taxation Analysis, said the new person heading the taxation office must focus on improving the nation's taxation system.
Ken Dwijugiasteadi, the new acting director-general of the ministry's taxation office, was not immediately available to comment.
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