Budget surplus for 1996/1997 hits $340 million

Budget surplus for 1996/1997 hits $340 million

JAKARTA (JP): The Minister of Finance, Mar'ie Muhammad, said
yesterday the 1996/97 budget would have a surplus of about Rp
817.9 billion (US$340 million).

He told a House plenary session that 1996/97 budget revenue
would reach Rp 95.84 trillion and spending would be Rp 95.02
trillion.

The budget was originally envisaged to balance at Rp 90.6
trillion.

Mar'ie said the higher-than-estimated revenues were mainly
because of the oil and gas sector was expected to contribute Rp
19.87 trillion -- 40.7 percent higher than the Rp 14.12 trillion
expected.

"This will be made possible by the higher-than-estimated
average price of Indonesian crude oil exports," Mar'ie said.

He estimated the average price of Indonesian crude oil during
the fiscal year at $20.76 a barrel. The forecast average price
was $16.50 a barrel.

Revenue from non-oil and gas sectors are estimated to reach Rp
64.92 trillion. The original target was Rp 64.08 trillion.

Direct and indirect tax receipts are estimated at Rp 55.8
trillion, or 0.3 percent lower than targeted.

Value added taxes will contribute Rp 20.39 trillion or 6.4
percent of the total; less than income tax revenue of Rp 25.49
trillion which is 7.5 percent more than the target.

The decline in value added tax revenue was caused by the
government's policy to exempt domestic shipping industry and
docking services from value added tax.

In addition, the government expected to disburse up to Rp 2.5
trillion in value added tax refunds to exporters this fiscal
year.

Mar'ie said revenue from property taxes would be Rp 2.28
trillion, slightly higher than the Rp 2.27 trillion target.

Excise revenue is estimated to increase 4.6 percent to Rp 4.2
trillion because of increases in the cost of most goods subject
to excise.

But income from import duties were projected to fall 18.6
percent to Rp 2.8 trillion because of the government's policy of
further lowering import tariffs, Mar'ie said.

Nontax revenue was projected to rise 25 percent to Rp 9.08
trillion.

The increase was attributed mainly to the block selling of
government shares in state telecommunications company PT Telkom.
This generated Rp 1.35 trillion.

The Rp 400 billion in reforestation funds was lent to state
aircraft maker, PT IPTN, and then converted into that firm's
equity.

Mar'ie said the government's routine spending was estimated to
increase 9.7 percent from the original target to Rp 61.56
trillion.

The increase would be generated by the higher-than-budgeted
expenditure on buying goods by ministries and other state
agencies and higher debt servicing.

Goods purchases are estimated to increase 9.9 percent from the
original target to Rp 7.24 trillion and debt servicing 15.8
percent to Rp 23.43 trillion.

"The 1996/97 budget needs to be amended, because actual
revenues are estimated at Rp 95.84 trillion and spending at
95.022 trillion rupiah, resulting in a Rp 817.9 billion surplus,"
Mar'ie said.

Besides reporting on changes in the current state budget,
Mar'ie predicted Indonesia's total 1996/97 exports would rise 10
percent to $52.6 billion.

Mar'ie said imports would reach $61.4 billion in the 1996/97
budget, expanding the country's current account deficit to $8.8
billion."

He predicted inflation of about 6 percent for the fiscal year.
Indonesia's inflation was 6.47 percent in calendar 1996 against
8.64 percent in 1995. (rid)