House asks govt to raise tax revenue target for 2003
House asks govt to raise tax revenue target for 2003
Dadan Wijaksana, The Jakarta Post, Jakarta
The House of Representatives is urging the government to revise
some of the expenditure and revenue figures in the draft 2003
state budget to make it more responsive to current global
economic developments and the real needs of the economy.
"Everything (from the budget) needs some adjustment in both
state revenues and expenditures," chairman of the House budget
commission Abdullah Zainie told reporters after a budget
deliberation with the finance ministry's director general for
state budget Anshari Ritonga on Tuesday.
On the revenue side, Zainie said that the proposed tax revenue
target for 2003 could still be increased to help the budget in
financing the economic development program.
As stated in the state budget draft, presented by the
government last month before legislators, tax income for 2003 was
targeted to stand at Rp 260.8 trillion (US$29.2 billion), or 13.3
percent of gross domestic product.
Zainie said that the tax ratio could still be raised to 3.5
percent.
This should come as a surprise amid concern from businessmen
stating that the target proposed earlier by the government would
hurt businesses due to current economic difficulties and
shrinking export markets overseas.
In comparison, the tax target for this year has been set at Rp
219.6 trillion, which accounts for some 13 percent of GDP.
Zainie also asked the government to allocate more funds to the
development program, which was set at Rp 54.5 trillion under the
proposed budget.
He said that such a meager amount would be insufficient to
generate economic activities to push economic growth.
In percentage terms, the amount was less than the target for
this year. The targeted spending for development for 2003
accounts for only 2.8 percent of GDP, compared with 3.1 percent
this year.
According to Zainie, the government should also take into
consideration the latest developments worldwide in determining
assumptions for the oil price, which for 2003 has been set at
$20.50 per barrel.
"Under the current circumstances, it's possible for the price
to rise to $22 per barrel," he added.
He was referring to the increasing political tension in the
Middle East, triggered by threats from the U.S. to launch an
attack on Iraq, which has sent the international oil price to
about $29 per dollar.
The House and the government will continue their deliberations
next week.