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Indonesia Expects To Reach Tax Revenue Targets

by Mary Swire, Tax-News.com, Hong Kong

18 June 2012


Bambang P.S. Brodjonegoro, from the policy unit of Indonesia’s Ministry of Finance, has stated that the government expects tax revenue to be higher this year than last year, and then to achieve its target also next year.

Bambang disclosed that, in 2013, the government could achieve its target for annual tax revenue of IDR1,000 trillion (USD105.2bn). The annual tax revenue target was set at IDR611.22 trillion in 2010, while the target in 2011 was IDR724.63 trillion, and tax collections are expected to reach IDR871.93 trillion this year.

The increased collections, he said, were in line with the government’s efforts to improve its tax database, and boost tax collection in order to relieve pressure on its budget. The government, Bambang continued, “aims to widen the tax base, in addition to the growth of taxes arising naturally from economic growth”.

Last year, the Ministry of Finance launched the national tax census, with the aim of increasing the number of Indonesian taxpayers. It was said that the country’s tax base presently consists of only 7.7% of its potential individual taxpayers, equivalent to 8.5m people out of a possible 110m employees, and only 3.8% of its potential corporate taxpayers, or some 460,000 businesses out of 12m registered firms.

After the census, the government is now targeting other sectors, such as domestic trading. Bambang added that it considers that the trading sector has a substantial turnover, but traders are reluctant to pay their taxes.

TAGS: individuals | compliance | tax | business | tax compliance | commerce | corporation tax | Indonesia | revenue statistics | retail | individual income tax

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