Govt expects higher non-tax income

Govt expects higher non-tax income

Dadan Wijaksana, The Jakarta Post, Jakarta

The government expects this year's non-tax revenue to increase by
more than 60 percent from the original allocation in the 2004
state budget, due mostly to the soaring oil prices.

As stated in the revised 2004 state budget, agreed jointly by
the government and House of Representatives Budget Committee last
week, the non-tax revenue has now been earmarked at around Rp 122
trillion (US$13.35 billion), or 60.6 percent higher than the
initial target of Rp 77.1 trillion.

The largest contribution to the extra proceeds was expected to
come from the natural resources revenue -- mostly oil and natural
gas, which was targeted to generate some Rp 92.4 trillion, almost
twice the initial target of Rp 47.2 trillion.

The government decided to revise the state budget chiefly
because of significant changes in the oil price. The original
state budget assumed an average of $22 per barrel for the year.
But with soaring oil prices, the government now assumes a much
higher oil price average of $36 per barrel this year.

Last week, world oil prices were closed steady after hitting
record highs in London the day before. The benchmark Brent North
Sea crude oil dipped 13 U.S. cents to $45 a barrel, a day after
reaching a new record of $45.75.

While the high-flying oil prices is causing a headache for the
government as it inflates fuel subsidy cost, the increased
revenues it obtains as an oil-and-gas exporting country serves as
a "positive side" of the current oil market volatility.

Although in the end, the government will still have to split
the income with regions as part of a mandated revenue-sharing
mechanism.

On income from forestry, it has also been raised by 167
percent to Rp 2.7 trillion from Rp 1.7 trillion.

However, on fishery, the income target was reduced by 50
percent from Rp 600 billion to Rp 300 billion.

Revision to 2004 State Budget

Non-tax revenue Rp123.8 t

1. Natural Resources Rp 92.4 t

2. Profit transfer from SOEs Rp 9.1 t

3. Others Rp 22.3 t

Source: The House Budget Committee

SOEs: state-owned enterprises