Govt rakes in Rp 73.25 trillion in tax revenue

JAKARTA (JP): The government announced on Monday that tax revenue as of June 15 stood at Rp 73.25 trillion (about US$6.42 billion), which is 39.54 percent of the Rp 185.26 trillion target set for 2001.

The Ministry of Finance's Director General of Tax, Hadi Poernomo, issued a statement outlining that the collected tax revenue slightly exceeded the tax office target of Rp 73.09 trillion for the period.

He gave no details on the specific tax components that have contributed to total tax revenue so far.

The government initially set the 2001 tax revenue target at Rp 176.89 trillion, but following the recent state budget revision, raised it to Rp 185.26 trillion.

The government revised the current state budget as the sharp drop in the value of the rupiah against the U.S. dollar and rising domestic interest rates threatened the budget deficit of widening to 6 percent of gross domestic product (GDP).

Higher tax revenue will help the government limit the deficit to a safer level of 3.7 percent of GDP.

But there has been concern that the government may fail to meet the tax revenue target, particularly amid the current economic woes and domestic political instability.

Experts also pointed out the abolishment and revision of several tax regulations aimed at boosting revenue.

Among the abolished tax regulations was the imposition of the value added tax on vegetables. Also, the income tax payments on bank savings accounts has been slashed in favor of low income earners.

The government also recently announced that it had exempted several items from the list of products subject to luxury sales tax.

At first, the revised state budget also called for a hike in value added tax (VAT) to 12.5 percent from 10 percent, but the government dropped the plan after legislators refused to approve it. Legislators argued that the VAT increase would create an unacceptable burden on businesses, as the government had also raised fuel prices and electricity charges to help resolve the deficit problem.

Hadi further said that his office had imposed disciplinary sanctions on 152 tax officials for breaching regulations.

"Thirteen of the 152 people have been given strong sanctions, with five of them dismissed," he said.

He added that, to filter out people who do not have tax registration numbers, his office would launch a campaign aimed at owners of real estate, stores and luxury cars.(bkm)