Tax revenues up by 112 percent

The Jakarta Post, Jakarta

Director General of Taxation Hadi Purnomo said over the weekend that, as of October, state revenue from taxes had increased by 112 percent to Rp 155.7 trillion (US$132 billion) from the same period last year, on improved tax compliance.

Hadi said the revenues accounted for 74 percent of the country's tax target this year of Rp 210 trillion, but excluding those from excise, import duties and export taxes, which were projected to reach a total of Rp 37.6 trillion.

"We are optimistic that the tax target this year can be met, although we have only two months to collect the remainder," he said.

He explained that of total revenues, Rp 73.4 trillion was derived from non-oil and gas income tax, Rp 15.9 trillion from oil and gas income tax, Rp 56.2 trillion from value-added and luxury taxes, Rp 8.8 trillion from land and property tax and Rp 1.4 trillion from other taxes.

By the end of this year, around 49.1 percent of the tax revenue target is expected to come from income tax, 31.8 percent from value-added and luxury taxes, with the remainder from other taxes.

To meet the target, the Directorate General of Taxation would focus more on raising tax compliance to 40 percent this year from 30 percent last year, said Hadi.

Tax revenue this year is expected to become the backbone of state revenue, contributing around 75 percent.

In the past few years, the government has relied more on tax revenues to support the country's fiscal consolidation process (reducing the budget deficit and debt levels) because of the very limited scope for cutting expenditure in other areas.