Ritonga bullish about income tax revenues<\/p>\n
JAKARTA (JP): Tax Director General A. Anshari Ritonga is
\noptimistic about achieving the Rp 40.6 trillion (US$5.07 billion)
\ntarget of income tax receipts set for the 1999\/2000 fiscal year
\nending next March, despite a steady fall in time deposit rates.<\/p>\n
Ritonga confirmed on Wednesday that income tax receipts from
\ntime deposits had been declining sharply, due to a steady
\ndecrease in interest rates, but he said this would be more than
\noffset by bigger revenues from other sectors.<\/p>\n
\"I think the positive impact of high interest rates on time
\ndeposits to as high as 70 percent in the last quarter of last
\nyear was a bit exaggerated,\" he said.<\/p>\n
The government charges a flat (final) 15 percent income tax on
\nthe interest income from time deposits.<\/p>\n
He said even though income tax receipts from time deposits in
\nthe 1998\/99 fiscal year more than doubled, to Rp 15 trillion from
\ntheir target of Rp 7 trillion, their proportional role in total
\nincome tax revenue was only about 30 percent, and in total tax
\nrevenue about 17.15 percent.<\/p>\n
Ritonga said despite the 13 percent contraction in the economy
\nlast year and the losses suffered by most big companies, leading
\nto reduced income tax payments, total tax receipts in the
\n1998\/1999 fiscal year reached Rp 87.4 trillion, much higher than
\nthe Rp 58 trillion target.<\/p>\n
The tax directorate general administers only income tax, value
\nadded tax and property tax, while export tax, import duty and
\nexcise tax lie under the jurisdiction of the customs and excise
\ntax directorate general.<\/p>\n
He attributed the higher tax receipts to increased revenue
\nfrom agrobusinesses, export-oriented companies, mining ventures
\nand financial companies engaged in foreign exchange transactions.<\/p>\n
\"Since the macroeconomic condition in the current fiscal year
\nis predicted to be much better than last year, there is no reason
\nat all to doubt the feasibility of the income tax revenue target
\nfor the current fiscal year.\"<\/p>\n
The government and the International Monetary Fund have
\npredicted economic growth for the current fiscal year at
\nbetween minus 1 percent and zero growth, compared to a
\ncontraction of 13 percent last year.<\/p>\n
Ritonga estimated the expected decline in income tax receipts
\nfrom time deposits (due to lower interest rates) would be more
\nthan offset by increased receipts from other sectors.<\/p>\n
\"We will surely receive increased income tax revenue from the
\nsales of state companies,\" he said.<\/p>\n
Over the past eight weeks alone, the privatization program
\nhas raised more than US$880 million for the state coffers, or
\nmore than 50 percent of the $1.5 billion target set for the whole
\nfiscal year.<\/p>\n
Tax receipts from this program are derived from the income
\ntax imposed on capital gains.<\/p>\n
\"We are also expecting considerable income tax revenue from
\nasset sales currently being conducted by the Indonesian Bank
\nRestructuring Agency.\"<\/p>\n
He said the balance between the sales value and book value of
\nassets auctioned by the restructuring agency was subject to
\nincome (capital gains) tax.<\/p>\n
He said another new major source of income tax revenue is
\ninterest income from the bonds, worth more than Rp 350 trillion,
\nwhich the government will soon issue to recapitalize private and
\nstate banks.<\/p>\n
\"Moreover, since the economy is predicted to contract only by
\n1 percent, compared to minus 13 percent last year, income tax
\nreceipts from the corporate sector will accordingly be much
\nbigger.\"<\/p>\n
However, Ritonga cautioned that all the projections assume
\nthat the situation will remain stable and peaceful before and
\nafter the June 7 elections. (vin)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ritonga-bullish-about-income-tax-revenues-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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