Economist envisages 2020 tax revenue to touch Rp1,223.2 trillion

Economist envisages 2020 tax revenue to touch Rp1,223.2 trillion

Illustration: An employee counts rupiah in Jakarta (Antara Foto / Sigid Kurniawan)

Jakarta (ANTARA) - Research Coordinator at Danny Darussalam Tax Center (DDTC) Denny Vissaro has projected this year’s tax revenue to reach Rp1,218.3 trillion to Rp1,223.2 trillion, or some 97.2 percent to 97.6 percent of the government's outlook.

"In other words, the performance of tax revenue this year is estimated to grow between minus 8.5 percent and minus 8.2 percent," he stated during an online public discussion here on Tuesday.

In the meantime, the change in the 2020 State Budget, as stipulated in Presidential Regulation No. 54 of 2020 tax revenue, is forecast to decrease 5.9 percent as compared to the realization of 2019, or some Rp1,254.1 trillion.

Vissaro noted that the performance of income tax (PPh), both individuals and entities, is expected to witness the highest impact owing to declining economic activity.

He expounded that the economic activities of business actors were hindered by limited mobility, both within and between nations, which ultimately resulted in a reduction in import-based tax revenue activities, such as import-based value added tax (VAT) and Article 22 of Import Tax.

However, Article 21 of Income Tax has the potential to become a mainstay as recorded in March 2020, specifically income tax from employees still grows 4.94 percent, albeit down from 14.7 percent growth in 2019.

"If the government is able to prevent the termination of employment (PHK), then Article 21 of Income Tax (PPh) is projected to still be able to become one of the main sources of revenue," he pointed out.

In addition, value-added tax can be a mainstay as long as the level of consumption of the domestic community is maintained since until March 2020, its revenue is still growing by 10.27 percent.

This is mirrored in the government's economic outlook that assesses the level of household consumption to still grow some 3.2 percent so far this year.

"It is just that the import-based value-added tax (VAT) is likely to lead to negative growth due to declining international trade," he added. Related news: 2020 State budget deficit to be Rp307.2 trillion
Related news: COVID-19 estimated to cause 50-percent drop in tourism revenue


 

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