Indonesia's tax office has so far collected 82 percent of its tax revenue target for 2015. (JG Photo/Safir Makki)

Tax Chief Apologizes as Revenue Expected to Miss 2015 Target


OCTOBER 09, 2015

Jakarta. Indonesia has so far collected only 53 percent of its tax revenue target for this year, and with 2016 fast approaching, it seems unlikely the government will reach its goal from the revised 2015 state budget.

The government collected Rp 686 trillion ($50 billion) in taxes, excluding excise and duties, from January to Oct. 5, recent data from the Finance Ministry's tax directorate general showed.  This year's tax revenue target was set at Rp 1,294 trillion.

"I'm sorry, I have failed to fulfill the mandate that was given to me. I'm ready to face the consequences," Sigit Priadi Pramudito, director general of the Finance Ministry's taxation office, said at a hearing with House of Representative's commission XI, which oversees finance and banking.

Several attempts from the tax office to increase revenue  ̶  including seeking access to bank deposit records, implementing new taxes on toll road users and applying higher tariffs on revenue stamps  ̶  were met with severe public criticism and ultimately cancelled, Sigit said, further weakening receipts that has been hit by low commodity price and weakening economic growth.

He added that his office now expects tax revenue to reach 91 percent of this year's target at best.

Still, Sigit vowed next year's collection efforts will improve on the back of a stronger tax team and better infrastructure.

"Our staff numbers are far from ideal. We need 62,000 tax employees but we now only have 37,000 employees," Sigit told reporters after the hearing.

This means that one Indonesian tax officer has to oversee 7,000 people, compared to Japan where the ratio is 1:1,000.

"We're adding 4,000 employees and 10 offices next year," Sigit said.