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)