Finance minister: Tax revenue target more moderate

Jakarta (ANTARA News) - Finance Minister Sri Mulyani Indrawati described as moderate under the prevailing condition the tax revenue target of Rp1,609.4 trillion set in the draft state budget for 2018.

"This is more moderate in comparison with tax growth projection of 14 percent this year," Sri Mulyani told reporters after President Joko Widodo presented the draft state budget and financial note at the Parliament here on Wednesday.

The minister said the government set a moderate target so as not to bring about too much pressure on the economy as well as on the business players.

"If we set too high target the ones to suffer from the pressure are sectors that have faithfully paid taxes such as the trading industry," she said.

The government, therefore, will continue communications with the business people that they would not worry too much about taxes, she said.

"WE will keep communications with the business people through Kadin (the Chamber of Commerce and Industry) and Apindo (the association of business people) and tell them in details about our targets and plans," she said.

She promised that the government would continue the process of tax reform, which has been progressing well, in 2018.

There would be relaxation through tax incentive including tax holiday and tax allowance, and possible tax exemption on certain goods.

The tax revenue target of Rp1,609.4 trillion includes non oil/gas taxes Rp1,379.4 trillion, customs and excises revenues Rp194.1 trillion and oil and gas sales tax Rp35.9 trillion.

The minister said improvement would be made in data preparation and tax information system to be more up to date and integrated, and to improve compliance of tax payers.

In 2018 Indonesia will adopt the automatic Exchange of Information (AEOI) to prevent tax evasion.

Taxation observer Yustinus Prastowo said the state tax revenue target is more moderate and realistic than the target set for 2017.

The target is 9-10 percent higher as against a growth of 15 percent set for 2017, when realization is expected to reach only 86-91 percent, Yustinus said on Wednesday.

The target for state income set in the draft budget for 2018 is Rp1,878.4 trillion including tax revenues of Rp1,609.4 trillion and non tax revenues of Rp267.9 trillion.

The target set for state spending is Rp2,204.4 trillion including Rp1,443.3 trillion for central government spending and Rp761.1 trillion for transfers to the regions and village funds. (*)