Government not to revise VAT receipt target<\/p>\n
JAKARTA (JP): Director General of Taxation Fuad Bawazier
\naffirmed yesterday that the target for value-added tax (VAT)
\nrevenue in the 1997\/1998 fiscal year would not be revised despite
\nthe drop in tax receipts in the last fiscal year ending
\nyesterday.<\/p>\n
\"There will be no revision of the VAT revenue target for the
\n1997\/1998 budget,\" Fuad told journalists when accompanying
\nlegislators in observing taxpayers trying to beat the deadline
\nyesterday for the filing of their 1996 annual income tax returns
\nat Taman Sari and Gambir tax offices, Central Jakarta.<\/p>\n
At a recent hearing of the House budgetary commission,
\nMinister of Finance Mar'ie Muhammad reported that direct and
\nindirect tax receipts were estimated at Rp 55.8 trillion (US$23
\nbillion) last fiscal year, 0.3 percent lower than the target.<\/p>\n
The decline was caused mainly by a drop in VAT receipts which
\nwere Rp 1.395 trillion short of the target of Rp 21.788 trillion.<\/p>\n
VAT receipts were estimated to contribute Rp 20.39 trillion,
\nor 6.4 percent of the target but income tax revenue reached Rp
\n25.49 trillion, 7.5 percent higher than the target.<\/p>\n
Mar'ie said the decline in VAT receipts was caused by the
\ngovernment's policy to exempt the domestic shipping industry and
\ndocking services from value-added tax.<\/p>\n
In addition, Fuad said yesterday, the government had disbursed
\nRp 2.8 trillion in VAT refunds to exporters and Rp 900 billion in
\nincome tax refunds last fiscal year.<\/p>\n
\"The amount of refunds is truly large, but that is part of our
\ntax system, which gives special treatment to exporters in VAT
\nrefunds,\" Fuad was quoted by Antara as saying.<\/p>\n
Fuad noted that the collection of taxes under his directorate
\ngeneral's jurisdiction -- mainly VAT, income tax and property tax
\n-- had been higher than the targeted revenue.<\/p>\n
The tax office collected a total of Rp 48.739 trillion last
\nfiscal year, higher than the budget's target of Rp 48.343
\ntrillion.<\/p>\n
Revenue from property taxes was projected to reach Rp 2.28
\ntrillion last fiscal year, slightly higher than the Rp 2.27
\ntrillion target.<\/p>\n
The collection of other taxes, especially export and import
\ntaxes as well as excise, is undertaken by the Directorate General
\nof Customs and Excise.<\/p>\n
Excise revenue was estimated to increase 4.6 percent to Rp 4.2
\ntrillion last fiscal year because of increases in the costs of
\nmost goods subject to excise.<\/p>\n
But receipts from import duties were projected to fall 18.6
\npercent to Rp 2.8 trillion because of the government's policy of
\nfurther lowering import tariffs.<\/p>\n
Director General of Customs and Excise Soehardjo Soebardi said
\nrecently that the government's national car policy had partly
\nbeen responsible for the lower revenue from import duties.<\/p>\n
The car policy, announced in February last year, provides duty
\nand tax breaks to PT Timor Putra National -- a company controlled
\nby President Soeharto's youngest son Hutomo Mandala Putra -- for
\nthree years to manufacture Timor sedans, deemed as national cars,
\nin cooperation with Kia Motors Corp. of South Korea.<\/p>\n
Fuad, however, noted that the national car program did not
\naffect his office's tax collection although it exempted Timor
\nPutra's cars, imported fully assembled from South Korea since
\nlast August, from luxury sales tax.<\/p>\n
He added that the government had taken into account the
\nnational car program when drafting the tax revenue target for the
\ncurrent 1997\/1998 budget. (rid)<\/p>",
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