Govt confident in achieving tax revenue target

Govt confident in achieving tax revenue target

JAKARTA (JP): Minister of Finance Mar'ie Muhammad reassured
yesterday that the government's domestic revenue from taxes would
reach its target despite the monetary crisis and subsequent
economic downturn.

Speaking at a hearing with the House of Representatives
Commission VIII for state budget and finance, Mar'ie said revenue
from income taxes would achieve its target but not revenue from
value-added taxes (VAT).

"Although the current economic condition is not as good as
last year, the government is trying to reach its domestic revenue
target from taxes," Mar'ie said.

"Nevertheless, revenue from VAT would be about the same as the
target or slightly lower," Mar'ie said in a written answer to the
commission's written questions.

Tax revenue for the first half of the fiscal year was Rp 25.04
trillion (US$7.36 billion), or about 38.7 percent of this year's
target of Rp 64.71 trillion.

Of total tax revenue, VAT revenue was Rp 8.93 trillion, or
36.3 percent of its target of Rp 24.6 trillion.

Mar'ie said during the first half, the government waived VAT
taxes totaling Rp 127.9 billion, excluding waivers granted to the
"national" car imported from South Korea or imported capital
goods.

The decline in VAT revenue will be offset by revenue from
income taxes as well as property and building taxes.

For the first half of the fiscal year, the government
collected Rp 11.56 trillion from income taxes, or 39.7 percent of
its target.

Mar'ie said income taxes from companies having debt
denominated in U.S. dollars would decline as their profits would
drop.

"Nevertheless, in the last three months (Oct., Nov. and Dec.)
we will see an increase in revenue, especially from the tax on
founding shareholders, tax from the sale of property and
buildings and from import duties," Mar'ie said.

Revenue from property and building taxes was Rp 856.7 billion
for the first half, or 34.2 percent of this year's target.

Mar'ie projected that revenue from property and building taxes
for the fiscal year would exceed its target because such taxes,
especially from mining, rural and urban sectors, were usually
paid in October, November, December and March.

"As an illustration, in October alone we received Rp 567.3
billion from property and building taxes," Mar'ie said.

Revenue from import duties stood at Rp 1.39 trillion in the
first half, or 41 percent of this year's target.

Mar'ie said revenue from import duties would increase as a
result of the rupiah's depreciation, which forced importers to
pay more of their duties in rupiah.

The current state budget is Rp 101.08 trillion.

The government has targeted Rp 15.02 trillion in revenue from
the oil and gas sector, including proceeds from the sale of
petroleum products, Rp 64.71 trillion from various taxes, 8.22
trillion from nontax revenue and Rp 13.02 trillion from offshore
loans.

Mar'ie said revenue from oil and gas would achieve its target,
except that from the sale of petroleum products.

The government has projected it will rake in Rp 249.2 billion
in proceeds from the sale of petroleum products. But during the
first half of the fiscal year, the government did not record any
revenue from the sale of the products.

"And for the second half of this fiscal year, we will likely
subsidize the sale of petroleum products due to the sharp
depreciation of the rupiah against the U.S. dollar and the
relatively high price of crude oil," Mar'ie said.

Besides fuel products, the government has also allocated a
significant amount of funds for other subsidies, including for
fertilizer production and distribution and for some state firms
and agencies.

The government has earmarked Rp 31.5 billion in subsidies for
state-owned railway firm Perumka for infrastructure maintenance.

The government has also provided Rp 5.5 trillion in subsidized
liquidity credit, as of August, to the National Logistics Agency
(Bulog), Rp 3.7 trillion to plantation firms and Rp 1.5 trillion
to cooperatives. (rid)