Tax receipts expected to fall short of target

Jakarta (ANTARA News) - Director General of Taxation Fuad Rahmany has predicted that tax receipts in 2014 will fall short of the target of Rp1,072.3 trillion set by the government.

"Hopefully, 94 percent of the target could be achieved," he said after signing a memorandum of understanding with the directorate general of public law administration at the law and human rights ministry here on Tuesday.

If 94 percent of the target was achieved, the state would earn Rp1,007.96 trillion from taxes this year, he said.

The reasons for lower-than-expected tax receipts were inseparable from classic obstacles, including tax officers who are vastly outnumbered by taxpayers, he said.

To date, there are 60 million potential individual taxpayers but only 40 percent or 25 million of them paid taxes. Meanwhile, only 11 percent or 550 thousand of five million corporate taxpayers paid taxes, he said.

He said his office should cooperate with various agencies more actively to trace taxpayers to make them pay their tax obligation.

Fuad said in the past, lower-than-expected tax receipts were due to declining revenues from luxury sales tax.

It was difficult to tap luxury sales tax potential after the government introduced low-cost and green cars (LCGC) which are exempt from luxury sales tax, he said.

"The LCGC are exempt from luxury sales tax, so many people switch to the low-cost cars which were previously categorized as luxury goods," he said.


Reported by Indra Arief Pribadi