"Two reasons for the deficit to widen were government spending Rp113 trillion higher and state revenues Rp33 trillion lower than last year in the same period," Bambang said.
Jakarta (ANTARA News) - Finance Minister Bambang Brodjonegoro said budget deficit widened almost tripling year-on-year in the first half of 2016 on high government spending and shortfall of state tax revenues.

The deficit surged to Rp230.7 trillion in the first six months of the year or 1.83 percent of the countrys Gross Domestic Product (GDP) from Rp84.3 trillion or 0.73 percent of the GDP in the same period last year

"Two reasons for the deficit to widen were government spending Rp113 trillion higher and state revenues Rp33 trillion lower than last year in the same period," Bambang said at working meeting with the Budget Commission of the House of Representatives here on Wednesday.

The minister said in the first half of the year, state revenues totaled Rp634.7 trillion or 35.5 percent of the whole years target of Rp1,786.2 trillion as against state spending, which already reached Rp865.4 trillion or 41.5 percent of the whole years target of Rp1,984.1 trillion.

The state revenues included Rp522 trillion in taxes or 33.9 percent of the whole years target of Rp1,539.2 trillion and Rp112.1 trillion in non tax state revenues or 45.7 percent of the wholes years target of Rp245.1 trillion.

The tax revenues included oil and gas income tax totaling Rp16.3 trillion or 44.9 percent of the target of Rp36.3 trillion, income tax from non-oil/gas sector reaching Rp270.5 trillion or 33 percent of the target of Rp819.5 trillion , value added tax (VAT) reaching Rp169.2 trillion or 35.7 percent of the target of Rp474.2 trillion and excises totaling RpRp44 trillion or 29.7 percent of the target of Rp148.1 trillion.

"Income tax from the oil and gas sector shrank on oil price fall. VAT also declined on shrinking household consumption and rising repayment of expenses. Excise income fell on weak demand for cigarette revenue stamps," the minister said.

State spending included Rp481.3 trillion by the central government or 36.8 percent of the whole years target of Rp1,306.7 trillion and Rp384 trillion in transfers to the region and rural funds or 49.5 percent of the target of Rp776.3 trillion.

The spending by the central government included spending by cabinet ministries reaching Rp262.8 trillion or 34.2 percent of the target of Rp767.8 trillion and spending by non ministerial agencies reaching Rp218.5 trillion or 40.6 percent of the whole years target of Rp538.9 trillion.

"The spending was quite high on transfers to the regions and rural funds totaling Rp384 trillion or around Rp50 trillion higher than last years Rp334.7 trillion . Rural funds already disbursed already reached Rp26.8 trillion in the first six months of the year as against only Rp7.9 trillion in the same period last year," the minister added.

Despite the budget deficit already reaching 77.7percent of the target of Rp296.7 trillion, Bambang said he was optimistic the fiscal deficit would narrow toward the end of the year partly on the tax amnesty program.

"We are hopeful that the performance would be better in the second half of the year as the tax amnesty program would contribute to improving the budget performance," he told the lawmakers.

His estimate puts state tax revenues at Rp1,017.2 trillion in the second semester of this year and budget deficit at Rp66 trillion or 0.52 percent of the GDP.(*)

Editor: Heru Purwanto
Copyright © ANTARA 2016