Govt confident of meeting tax target

Govt confident of meeting tax target

JAKARTA (JP): The government announced on Tuesday that it had
collected Rp 52.6 trillion (US$7.56 billion) in taxes between
April and October, accounting for about two-thirds of the target
for the entire fiscal year ending on March 31.

"As long as the economy continues to improve, or even if it
remains stable, we are optimistic of meeting our target,"
Director General of Taxation Anshari Ritonga said.

Tax revenues are projected to bring in Rp 79.03 trillion to
the government coffers in 1999/2000.

Ritonga said in the first six months income taxes contributed
Rp 32.5 trillion, value added taxes another Rp 17.8 trillion and
taxes on interest income on time deposits another 2.3 trillion.

Speaking at a news conference about the upcoming meeting of
the Study Group On Asian Tax Administration And Research
(SGATAR), Anshari also disclosed the government's plan to review
the current tax laws and expand the tax coverage.

The new law would particularly target small businesses, many
of which, because of loopholes, do not pay taxes at present.

"It's hard to monitor such businesses if they're owned by
individuals," he said, referring to owners of stores at shopping
centers like Mangga Dua in North Jakarta, from whom the
government receives no taxes on their businesses.

"We hope to impose a fair percentage of tax on their
turnover," he said.

The government of President Abdurrahman Wahid is currently
drafting the budget for the 2000/2001 financial year. Finance
Minister Bambang Sudibyo has said the government planned to
increase tax revenues and cut subsidies to reduce Indonesia's
reliance on foreign aid.

Ritonga said the government was also looking into the
possibility of abolishing tax holidays which were reintroduced by
the previous government of president B.J. Habibie.

The facility was inconsistent with the 1984 tax law, he said.

The government would look at other forms of incentives to
attract foreign investors, he added.

Habibie signed the decree this year giving foreign investors
operating outside Java and Bali a tax holiday of up to 13 years.

The upcoming SGATAR meeting, to be held in Denpasar, Bali,
from Nov. 22 to Nov. 26 will bring together tax officials from
Australia, China, Indonesia, Japan, Korea, Malaysia, New Zealand,
Taiwan, Singapore and Thailand.

Topics of discussion include tax treatment for corporate
restructurization, transfer pricing and criteria model for tax
audits.

These topics were relevant to current tax developments
following the economic crisis in the Asian region, Ritonga said.

SGATAR was established in 1971. Indonesia hosted the meeting
in 1972 and 1989.(03)