Govt falls behind revenue targets

The Jakarta Post, Jakarta

Tax revenue in the first four months of the year amounted to Rp 105 trillion (some US$11.6 billion), the Finance Ministry reported, up 24 percent compared to the same period last year on the back of intensified tax collection.

Meanwhile, revenue from customs and excise duties, meanwhile, reached Rp 15.4 trillion, a 6 percent rise, with higher revenue from tobacco excise duty compensating for a slump in import duties.

The ministry's director general of taxation, Darmin Nasution, told the House of Representatives budget committee during a hearing Monday that the government had as of April 30 collected a total of Rp 57.9 trillion in income taxes in the non-oil-and-gas sector, and Rp 9.2 trillion in oil-and-gas sector.

These figures represent rises of 23 percent and 33 percent rise, respectively, over the amounts collected during last year's first four months.

Besides income taxes, value-added tax (VAT) and luxury tax revenues came in at Rp 36 trillion, and land and building tax revenues at Rp 1.1 trillion.

These figures only represent 29 percent of the government's full-year target of Rp 362.8 trillion. The government collected Rp 298 trillion in tax revenues last year.

The government wants to further increase tax revenues to provide the lion's share of the money needed to fund the budget. At present, less than a fifth of the country's 220 million people are registered as taxpayers, while the tax service is notorious for corruption.

Finance Minister Sri Mulyani Indrawati recently installed Darmin and Anwar Suprijadi as the directors of the tax and customs services, respectively, to overall them and improve their performances. The government has also drafted bills amending the taxation, and customs and excise legislation.

Meanwhile, Director General of Customs and Excise Anwar Suprijadi reported that revenues from customs duties had, as of last month, reached Rp 3.7 trillion, or 22.8 percent of the full target for this year. Revenues from excise duties stood at Rp 11.6 trillion, or 31.8 percent of the full-year target.

Overall, the two figures account for only 29 percent of the full-year target of Rp 53 trillion. Furthermore, the excise revenue figure is more than a quarter less that the Rp 5 trillion the government managed to collect during the same period last year, although excise revenues have increased by almost the same percentage from Rp 9.3 trillion.

Anwar explained that the lower customs revenue was due to the government's recent lowering of a number of import duties in accordance with free trade agreements in the region. The rupiah's recent gains against the U.S. dollar had also affected revenues from the customs service.

The increase in excise revenues, meanwhile, was attributed to the government's recent 15 percent hiking of retail cigarette prices, and a 6 percent increase in Indonesia's tobacco production.

The government expects revenues from customs and excise to increase only slightly to Rp 54 trillion next year, mostly due to sluggish growth in global trade and ongoing cuts in import duties.
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