"There are two determining factors," Indef senior economist Didik Junaidi Rachbini said on Saturday. "First, purchasing power, which is currently declining. Second, the Finance Ministry’s capability, including the minister's leadership."
The next government's state revenue target will consist of tax revenue of Rp2,490.9 trillion, non-tax revenue of Rp505.4 trillion, and grants of Rp600 billion.
Realizing this target, especially the tax component, will be challenging, Rachbini warned. A capable finance minister is therefore essential.
He emphasized that declining purchasing power and the downward mobility of many middle-class households are significant obstacles.
"Tax compliance among the wealthy is also a problem. However, addressing these issues could make this difficult target attainable," Rachbini said.
Achieving the target also hinges on robust economic growth and tax system improvements. Enhanced taxpayer compliance, strict enforcement of tax laws, and tapping into the informal sector's tax potential are vital.
Rachbini stressed the need for continued tax reform, including digitalization and expanding the tax base.
"To meet such a lofty goal, we must significantly bolster tax collection capacity," he pointed out.
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Translator: Uyu Septiyati, Raka Adji
Editor: Anton Santoso
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