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)