Mar'ie says govt unlikely to reach revenue target

Mar'ie says govt unlikely to reach revenue target

JAKARTA (JP): The minister of finance, Mar'ie Muhammad, said
yesterday the government was unlikely to reach its tax revenue
target for the 1996/1997 fiscal year which ends this month.

Speaking at a plenary session with members of the House of
Representatives yesterday, Mar'ie said tax revenue was expected
to be slightly lower than planned.

"We have given a lower estimate for tax revenue because it is
unlikely that several indirect tax collections will reach their
target for this fiscal year," he said.

Mar'ie said this was because of the "many policies designed to
increase economic activity and anticipate various international
trade agreements".

"This, in turn, has caused a decline in receipts from value-
added tax, sales tax on luxury goods and import duties," he said.

Direct taxes, like income tax, are imposed on individuals or
businesses and usually increase with higher income or net worth.

Indirect tax is the same for each taxpayer, irrespective of
income or wealth. This includes value-added tax, property tax,
import duties, excise, export tax and sales and service tax.

Mar'ie said last week direct and indirect tax receipts were
estimated at Rp 55.8 trillion (US$23.25 billion), or 0.3 percent
below target.

Indirect tax receipts which were expected to be lower than
planned were value-added tax and import duties.

Value-added tax is expected to contribute Rp 20.39 trillion or
6.4 percent less than targeted, while revenue from import duties
are projected to fall 18.6 percent to Rp 2.8 trillion because of
the government's tariff reduction policy.

Mar'ie said the drop in value-added tax revenues was because
of the government exempting domestic shipping industry and
docking services from the tax, and increases in value-added tax
refunds and developments in the automotive and other industrial
sectors which were lower than expected.

Indirect tax receipts expected to exceed targets are property
tax and excise.

Mar'ie said revenue from property taxes would be Rp 2.28
trillion, slightly higher than the Rp 2.27 trillion target.
Excise revenue is estimated to increase 4.6 percent to Rp 4.2
trillion because of rises in the cost of most goods subject to
excise.

Income tax revenue is expected to reach Rp 25.49 trillion,
7.5 percent above the target.

Mar'ie said revenue from the non-oil and gas sectors were
expected to reach Rp 64.92 trillion. The original target was Rp
64.08 trillion.

Legislators passed into law yesterday amendments made to the
1996/1997 budget. (pwn)