Even though the tax revenue reached just 89.3 percent of the revised state budget (APBN) target of Rp1,198.8 trillion prescribed by the Presidential Decree 72/2020, the contraction was still better than the government's projection of 21 percent, she added.
"This is a little better even though the contraction is very deep compared to 2019, when tax revenue reached Rp1,332.7 trillion. This is much lower than the initial APBN, which targeted Rp1,642.6 trillion [in tax revenue] and compared to the Presidential Decree 72/2020, it also fell slightly from [the revised target of] Rp1,198 to Rp1,070 trillion,” she said at the KiTa State Budget press conference in Jakarta on Wednesday.
However, Sri Mulyani did not deny that 2020 was a tough year because the economy experienced a significant decline due to COVID-19.
The government also needed to issue various tax incentives to encourage and revive the business sector, which became a factor in the loss of state revenue through taxes, she remarked.
"In terms of the incentives we provided to the entire economy which caused some of our revenues to drop. The government-borne tax shows the government provided space for the community," she explained.
Sri Mulyani further informed that the negative growth in tax revenue occurred because all of its components experienced a contraction year-on-year. For instance, income tax from oil and gas reached Rp.33.2 trillion, or 104.1 percent of the Rp31.9 trillion target, but showed a decline of 43.9 percent compared to the same period last year, when it stood at Rp59.2 trillion.
"Income tax from oil and gas suffered the deepest blow. It can be seen that oil prices have not recovered and oil lifting is below the assumption," the minister remarked.
The realization of non-oil and gas taxes reached Rp1,036.8 trillion, or 88.8 percent of the target of Rp1,167 trillion fixed in the Perpres 72/2020. The figure showed a contraction of 18.6 percent compared to 2019, when non-oil and gas tax realization was recorded at Rp1,273.5 trillion.
"The figure is very much in decline compared to the original State Budget Law. However, compared to Presidential Decree 72/2020, the figure is 88.8 percent," Sri Mulyani said.
Non-oil and gas tax contracted 18.6 percent year-on-year as income tax revenue from non-oil and gas reached Rp560.7 trillion, or 87.8 percent of the Rp638.5 trillion target. They contracted 21.4 percent compared to 2019, when the revenue from non-oil and gas tax stood at Rp713.1 trillion.
Value added tax (VAT) also experienced a 15.6-percent contraction year-on-year to reach Rp448.4 trillion from Rp531.6 trillion the previous year. However, it reached 88.4 percent of the Rp507.5 trillion target prescribed by Perpres 72/2020.
Land and building tax realization reached Rp21 trillion, or 155.9 percent of the target of Rp13.4 trillion, but it still showed a contraction of 0.9 percent compared to the previous year, when the figure was recorded at Rp21.1 trillion.
Other taxes that were also included in the non-oil and gas tax component also contracted by up to 11.7 percent as the realization reached just Rp6.8 trillion compared to Rp7.7 trillion in 2019. But, it covered 90.6 percent of the Rp7.5 trillion Perpres target. (INE)
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EDITED BY INE
Translator: Astrid Habibah, Azis Kurmala
Editor: Suharto
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