Last year`s tax receipts exceed target of rp878.7 trillion

Jakarta (ANTARA News) - Indonesia`s tax receipts last year reached Rp872.6 trillion or 99.3 percent of the target of Rp878.7 trillion set in the revised 2011 state budget, the directorate general of taxation said.

"Compared to 2010, tax receipts in 2011 increased Rp149.3 trillion or 20.6 percent," Director General of Taxation Fuad Rahmany said in a press conference here on Tuesday.

He said the ratio of tax receipts to gross domestic product (tax ratio) last year reached 12.3 percent, up 1 percent compared to 11.3 percent the year before.

He said income tax receipts last year reached Rp431.08 trillion, accounting for 99.8 percent of the target.

"Compared to 2010 income tax receipts in 2011 grew 20.84 percent," he said.

Meanwhile, value added tax and luxury sales tax receipts in 2011 reached Rp277.73 trillion, accounting for 93.06 percent of the target of Rp298.44 trillion.

"The tax receipts fell short of Rp21 trillion of the target," he said.

Value added tax must be imposed on all financial transactions. However, many retail taxpayers had yet to fulfill their tax obligations, he said.

"Value added tax receipts have not reached optimum level because business agents` compliance with the obligation to pay value added tax was low," he said.

He said many transactions known as underground economy were not recorded last year and therefore, value added tax receipts fell short of the target.

"Many institutions which have tax-related data had yet to hand over the data. Moreover, the information technology system has not yet reached the informal sector as a whole," he said.

Therefore, he added to increase tax receipts this year the directorate general of taxation would focus on improving tax administration and supervising the retail sector so that value added tax receipts would not fall short of the target.

"We are considering to provide incentives in 2012 as an initiative so the economic sector that has not paid taxes this year will pay them," he said. (*)