Govt expects no major change in 95/96 budget
Govt expects no major change in 95/96 budget
JAKARTA (JP): Minister of Finance Mar'ie Muhammad estimated no
major change in the government's revenues in the 1995/96 fiscal
year, which will begin next April.
The minister said that tax receipts from the oil and gas
sectors will likely be around the same level of those projected
in the current fiscal year due to the gloomy prospect of the oil
market and the flattening level of production.
"The government's decision to lower income tax rates will also
cause a slower growth in revenues from non-oil taxes," he told
members of the House of Representatives at the opening of a four-
day plenary deliberation of the 1995/96 state budget.
The government's revenues in the current fiscal year are
projected at around Rp 69 trillion (US$32.43 billion), of which
Rp 12.85 trillion is expected to come from the oil and gas
sectors, Rp 46.88 trillion from non-oil sectors and another Rp
10.01 trillion from foreign aid.
Mar'ie estimated that crude oil prices on the international
markets will likely hover around this year's average level as
demand from developed countries remains low, while the supply
from non-OPEC countries continues increasing.
Indonesia is a member of the Organization of Petroleum
Exporting Countries (OPEC).
"Based on such a scenario, the projection on receipts from the
oil and gas sectors will be around the same as this year's
figure," he said, adding that the country's production levels of
both crude oil and natural gas will be also around the current
position.
Foreign aid
He said the government plans to reduce foreign aid and to
further encourage foreign investments to boost economic
activities.
The minister said that the government will not be able to
raise the salaries of civil servants with the planned tight
budget but he promised that allowance fees will be improved to
enable them to meet rising living costs.
He said the government also plans to increase allowances for
officials working in isolated areas to encourage development in
rural areas.
"The government also plans to increase the special assistance
for villages in remote areas as part of the rural development
program." he said.
About the loan repayment, the minister said that debt
servicing is expected to increase to US$8.6 billion next fiscal
year from $7.8 billion in 1994/95.
The government's foreign debt reached a total of $56.84
billion as of August, comprising of $7.31 billion (around 12.9
percent) from the United States, $25.23 billion (44.4 percent)
from Japan, $2.93 billion (5.2 percent) from Germany, $10.08
billion (17.7 percent) from the World Bank, $4.38 billion (7.7
percent) from the Asian Development Bank and the remaining 6.9
billion (12.1 percent) from other financial institutions and
donor countries.
The minister also said that the government will impose
stronger law enforcement to minimize tax evasion and manipulation
in the next fiscal year.
The government, according to the minister, has suffered a loss
of around Rp 48.4 billion due manipulations of tax refunds.
The minister also said that the total unpaid tax reached Rp
3.6 trillion ($1.7 billion) as of the first quarter of the
current fiscal year.
The government will make every attempt to collect the unpaid
tax, he said. The validity of collecting the unpaid tax is five
years but the term could be extended if the government continues
giving a warning letter. (hen)