Govt urged to take legal action against bad debtors

Dadan Wijaksana, The Jakarta Post, Jakarta

The government is considering boosting its tax collection costs to 2 percent of the state budget, in a bid to increase tax revenue, according to Minister of Finance Boediono.

He said on Monday that, on average, the tax collection cost amounted to 0.3 percent of the state budget, which was very low compared to other countries in the region.

"Our tax collection cost is still low compared to other countries, which can reach as high as 3 percent.

"It would not hurt if we could allocate 2 percent of the budget for this purpose, as long as there is an increase in (tax) revenue," Boediono told reporters, after officiating a closed- door meeting with his top aides here at the directorate general of tax.

He said that tax revenue would become one the state budget's main sources of income as the government had been determined to start reducing foreign loans.

However, he did not provide details on whether the government had already considered this when drawing up the 2003 state budget, which is currently being prepared.

Meanwhile, director general of tax Hadi Purnomo said that his office was on track to meet this year's tax revenue target.

"I am optimistic we'll meet the target," he said, adding that for the January, February period alone, the tax office has collected some Rp 24 trillion (US$2.4 billion).

That amount is 10 percent higher than the amount collected during the same period last year.

For this year, the state budget has targeted a total of Rp 184.7 trillion in tax revenue, of which Rp 88.8 trillion is expected to come from non-oil and gas income tax revenue.

As for last year, Hadi's office managed to slightly exceed the target of Rp 156.6 trillion after posting a tax collection of Rp 158.3 trillion.

Of the total collection during the first two months of the year, Hadi said it had come mostly from non-oil and gas income tax revenue.

There was also revenue from oil and gas income tax, but the amount was not significant, amounting to between Rp 2 trillion and Rp 2.5 trillion.

Hadi also pledged to raise tax revenue by between Rp 17 trillion to Rp 19 trillion this month.